The stock market is on pins and needles as interest rates have shot higher. While a huge increase would be dangerous for some sectors, the reality is that it looks like the Federal Reserve will begin to raise rates this year and will speed up the tapering of the quantitative easing program much faster than earlier expected.

One industry that loves rising interest rates is banking. When interest rates are higher, banks make more money, by taking advantage of the difference between the interest banks pay to customers and the interest the banks can earn by investing.

We screened our 24/7 Wall St. research database looking for bank stocks rated Buy that also pay the highest dividends. When you combine the positives of rising interest rates and an opening and improving economy, bank stocks could be poised for some outsized total return.

It is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.

Citigroup

Shares of this top bank have rallied off their lows but look poised to move significantly higher this year. Citigroup Inc. (NYSE: C) is a leading global diversified financial service company that provides consumers, corporations, governments a broad range of financial products and services.

Citigroup offers services such as consumer banking and credit, corporate and investment banking, securities brokerage, transaction services and wealth management. It operates and does business in more than 160 countries and jurisdictions in North America, Latin America, Asia and elsewhere.

Trading at a still quite cheap 8.7 times estimated 2022 earnings, this stock looks very reasonable in what remains a volatile stock market and in a sector that has lagged dramatically.

Citigroup stock investors receive a 3.25% dividend. Credit Suisse team has a $76 price target, and the consensus target is $81.74. Shares closed trading on Thursday at $64.91.

Citizens Financial

This remains a top financial pick across Wall Street. Citizens Financial Group Inc. (NYSE: CFG) operates approximately 2,700 ATMs and 1,000 branches in 11 states in the New England, Mid-Atlantic and Midwest regions, as well as through online, telephone and mobile banking services, and it maintains approximately 130 retail and commercial non-branch offices.