There are numerous aspects that can determine the investment banking salary for a potential future employee in the United States. While you can’t expect the investment banking starting salary or the entry level investment banking salary to be over the roof, you will be pleased to know that investment banking salaries are quite high in the U.S., almost triple the national median wage. The investment banking average salary can be different, depending on the source you look to, but it generally ranges from $80,000 to about $85,000 per year. The Bureau of Labor Statistics informs us that the average investment bank analyst salary is $80,310 per year (with $38.61 per hour), while Payscale tells us that the average career in investment banking salary is $84,290. Nevertheless, these numbers can greatly vary, according to a series of factors. Discover the definitive aspects for investment bank salaries below.
Investment Banking Salary Influencers
1. Industry
Quite possibly the most significant investment banking salary influential factor of all is the bank you work for. There are noticeable differences from one bank to the other, as you can see here:
- Goldman Sachs investment banking analyst salary – $83,349
- Goldman Sachs investment banking associate salary – $131,212
- JP Morgan investment banking salary for analysts – $80,181
- UBS investment bank salary for associates – $112,847
- Merrill Lynch investment banking salary for analysts – $74,449
- Bank of America investment banking salary for analysts – $79,543
- Credit Suisse investment banking salary for analysts – $80,825
- Deutsche Bank investment banking salary for analysts – $80,613
As you can see, not only is there a difference in wages from bank to bank, but also from the investment bank associate salary to that for analysts. If you want to follow the investment banking career path, you will begin with an analyst investment banking salary and work your way up to associate investment banking salary and even investment banking vice president salary or investment banking managing director salary.
2. Geographic Area
If you want to pursue a career in investment banking, you also have to be very careful with the location you choose to work in. Investment banking analysts and associates can make almost double in one state than they would in another, so make sure that you take time to analyze the best state to move to or live in to be an investment banking professional. The BLS, the source we mentioned in the introduction of our article, points out that the five top-paying states for those in the field of investment banking are:
- New York – $122,170
- Vermont – $109,660
- California – $107,010
- Colorado – $106,240
- Massachusetts – $105,130
If you don’t want a low investment banking salary – frankly, I don’t believe anyone wants this – you should try to steer clear of the following states, as they have the smallest wages in the country:
- Hawaii – $68,050
- South Carolina – $67,450
- Virgin Islands – $61,060
- Puerto Rico – $60,340
- West Virginia – $59,260
As for job opportunities, you have the greatest chances of being hired in New York, California, Texas, Massachusetts and Illinois. As an aspiring investment banking professional, you should therefore try to aim for New York and California for this career. These two states not only have some of the highest investment banking salary ranges in the country, but they also provide the most job openings.
3. Experience
The main aspect that candidates should consider about the field of investment banking is that there are five main stages in this career path, as Investopedia explains:
- Analyst
- Associate
- Vice President (VP)
- Director / Principal
- Managing Director / Partner
The starting salary investment banking professionals get is as analysts – around the $70k – $80k range. After that, they get promoted to an associate investment banking salary – anywhere from $150k to $250k. The next step is the investment banking VP salary – $250K – $1.5M. Following the vice president investment banking salary is the investment banking director salary – $400K – $1.5M and the last one is the managing director investment banking salary – $500K – $20M.
Working Hours and Environment
As expected, investment banking employees work in big financial institutions, usually in metropolitan areas. They work in an office environment full-time, with quite a few that work extra hours.
Investment Banking Salary by State
| State | Annual mean wage ($) |
|---|---|
| Alabama | 89420 |
| Alaska | 103020 |
| Arizona | 72570 |
| Arkansas | 68230 |
| California | 107010 |
| Colorado | 106240 |
| Connecticut | 100250 |
| Delaware | 85550 |
| District of Columbia | 99890 |
| Florida | 77010 |
| Georgia | 78700 |
| Hawaii | 68050 |
| Idaho | 74230 |
| Illinois | 96000 |
| Indiana | 72400 |
| Iowa | 78390 |
| Kansas | 82930 |
| Kentucky | 76210 |
| Louisiana | 83060 |
| Maine | 72250 |
| Maryland | 94760 |
| Massachusetts | 105130 |
| Michigan | 78910 |
| Minnesota | 86330 |
| Mississippi | 69560 |
| Missouri | 84590 |
| Montana | 86780 |
| Nebraska | 72820 |
| Nevada | 69010 |
| New Hampshire | 69370 |
| New Jersey | 94340 |
| New Mexico | 76620 |
| New York | 122170 |
| North Carolina | 88200 |
| North Dakota | 74230 |
| Ohio | 76070 |
| Oklahoma | 76040 |
| Oregon | 94210 |
| Pennsylvania | 81960 |
| Puerto Rico | 60340 |
| Rhode Island | 75040 |
| South Carolina | 67450 |
| South Dakota | 75080 |
| Tennessee | 76020 |
| Texas | 94410 |
| Utah | 77570 |
| Vermont | 109660 |
| Virgin Islands | 61060 |
| Virginia | 93840 |
| Washington | 78530 |
| West Virginia | 59260 |
| Wisconsin | 77430 |
| Wyoming | 87270 |
Bonuses and Benefit Packages
In addition to the sky-high investment banking salary, professionals in this field also have dental, vision and health care coverage, as well as a 401(k) plan. Possibly the greatest advantage is that they can advance well in their career, with some lucky individuals becoming directors or managing partners of banks after a decade or so of experience.
Job Outlook
The job outlook for investment banking is amazing for the next couple of years. While the national average for all occupations is projected to increase 7% until 2024, the percent change in employment expected for financial analysts is a whopping 12%. This is much faster than the majority of occupations in the U.S. economy.
Conclusion
All in all, the investment banking salary is the main reason why this occupation is becoming more and more popular. Even though the field is competitive, patience and years of experience accumulated can lead to a flourishing career in an extremely abundant industry.
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