In this article, we discuss the 10 Best Bank Penny Stocks to Buy Right Now.
According to Reuters, the Federal Reserve looks to be ready to cut interest rates by at least 25 basis points for the first time in 2025. Following three rate cuts in late 2024, the rates have been held at 4.25%-4.50% by the Fed, with traders now expecting two more reductions by the end of 2025, LSEG data shows.
U.S. equities have rallied to record highs, thanks to softer labor-market figures and easing inflation. Bank shares are among the top performers, while small-cap companies, which rely heavily on external borrowing, have already rallied more than 5% since Jerome Powell’s Jackson Hole remarks. The KBW Regional Banking Index (KRX) has returned 10.77% over the past year.
As small-cap banks and penny stocks rely heavily on external funding, lower rates act as a key tailwind for them. Due to cheaper borrowing and refinancing, capital frees up for growth, as reflected in the Russell 2000’s more than 5% rise since Powell’s Jackson Hole remarks.
However, the outlook for the banking sector remains mixed. Funding costs can go up and margins can flatten, as competition for deposits rises. Furthermore, a flatter yield curve narrows profit per loan. Yet the S&P 500 Banks Index has returned 23.15% on a year-to-date basis.
With this backdrop, let’s move to our list of the 10 Best Bank Penny Stocks to Buy Right Now.
Our Methodology
To curate our list of the 11 Best Bank Penny Stocks to Buy Right Now, we used the Finviz screener to extract a list of stocks in the banking sector that trade under a share price of $5. Next, we assessed the hedge fund sentiment surrounding these stocks using Insider Monkey’s hedge fund database, which tracks nearly 1,000 hedge funds. Finally, we present our list of the 11 Best Bank Penny Stocks to Buy Right Now in ascending order based on the number of hedge funds holding stakes in each stock, as of Q2 2025.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. CNFinance Holdings Limited (NYSE:CNF)
Number of Hedge Fund Holders: 1
CNFinance Holdings Limited (NYSE:CNF) is one of the 10 Best Bank Penny Stocks to Buy Right Now.
On August 28, 2025, CNFinance Holdings Limited (NYSE:CNF) reported its results for the second quarter of 2025. The company ended the quarter with a total loan balance of roughly $1.55 billion, down nearly 30% YoY, and interest income of about $57 million, a 55% decline. Meanwhile, operating expenses experienced a sharp decline of 74%, while financing costs went down by 30%.
CNFinance Holdings Limited (NYSE:CNF) registered a net loss of roughly $5.6 million due to an impairment charge. Yet the company registered a 103% recovery rate on non-performing loans, reflecting its effective asset management. The company’s management commented that the short-term pressure on loan volumes and earnings is part of its deliberate plan to stabilize funding channels, contain bad loans, and build a more sustainable growth trajectory.
CNFinance Holdings Limited (NYSE:CNF) offers micro-credit loan services to small and micro-enterprise owners, while also providing loan facilitation, post-facilitation, and guarantee services for commercial banks and agency lending for financial institutions across China. It is one of the Best Penny Stocks.
9. SHF Holdings, Inc. (NASDAQ:SHFS)
Number of Hedge Fund Holders: 2
With significant hedge fund interest, SHF Holdings, Inc. (NASDAQ:SHFS) secures a spot on our list of the 10 Best Bank Penny Stocks to Buy Right Now.
On September 2, 2025, SHF Holdings, Inc. (NASDAQ:SHFS) launched its Fully Managed Cannabis Banking Program, the first fully outsourced operational and compliance platform for financial institutions serving the regulated cannabis market.
Ahead of the PBC Conference 2025, this launch allows community banks, credit unions, and other institutions to offer compliant cannabis banking without expanding internal teams or adding new risk. SHF Holdings, Inc. (NASDAQ:SHFS) will manage client acquisition, onboarding, BSA/AML compliance, and account support, while deposits will be held directly by the partner institution. This model protects partners from reputational exposure and operational overhead. This way, a more efficient path is created that serves cannabis businesses at scale.
SHF Holdings, Inc. (NASDAQ:SHFS), a fintech company, provides banking, credit, payments, and compliance solutions exclusively to the legal cannabis industry across the U.S. It is one of the Best Penny Stocks.
