At present the two to five-year term deposits on offer from Commonwealth Bank of Australia (ASX: CBA) come with an interest rate of just 1.25% per annum on deposits of $50,000 and over.
This is lower than the current inflation rate of 1.7%. Which means that any funds invested in these term deposits are actually diminishing in real terms.
In light of this, I would suggest income investors consider switching their funds into one of these ASX dividend shares that offer far greater yields:
Australia and New Zealand Banking Group (ASX: ANZ)
I would sooner invest in this banking giant’s shares than one of its term deposits. After all, with the housing market recovering strongly, I believe ANZ’s earnings could be given a boost in the near future from increasing demand for mortgage loans. In addition to this, with its shares pulling back materially in recent weeks, they offer one of the more generous dividend yields on the local market. At present, ANZ’s shares provide investors with a partially franked 6.5% dividend yield.
National Storage REIT (ASX: NSR)
National Storage is one of the leading self storage operators in the ANZ region. Through its network of 168 storage centres, it provides tailored storage solutions to over 60,000 residential and commercial customers. It has been growing at a solid rate over the last few years and looks well placed to continue doing so for the foreseeable future. In FY 2020 management expects to grow its underlying earnings per security by greater than 4%. I feel this bodes well for its distribution, which already offers a generous yield of 5.1%.
Stockland Corporation Ltd (ASX: SGP)
A final option for income investors to consider is Stockland. This leading property group owns, manages, and develops a diverse range of property assets such as retail centres, retirement communities, and residential properties. As with the others, I feel it is well-placed for growth in the coming years. At present its shares offer a generous trailing 5.9% distribution yield.
The post These ASX dividend shares smash term deposits appeared first on Motley Fool Australia.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended National Storage REIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. 2019