Insights

Beat low interest rates with these 2 ASX dividend shares

Coles Group Ltd (ASX: COL) is one of the 2 strong ASX dividend shares I would consider today instead of term deposit accounts for income.
The post Beat low interest rates with these 2 ASX dividend shares appeared first on Motley Fool Australia. –

using asx dividend shares to beat low interest rates represented by group of people putting noose around giant 1%

Right now in Australia, interest rates have never, in history, been as low as they are today at just 0.25%. The Reserve Bank of Australia (RBA) has cut rates this low as a result of the severe economic recession the country (and the world) is currently going through as a result of the coronavirus pandemic. Although some of us are benefitting from these cuts by paying rock-bottom interest rates on the mortgage, savers and retirees are concurrently suffering. That’s because a cash rate of 0.25% means it’s very hard for banks to offer any decent, inflation-beating interest rates on savings accounts and term deposits. These days, it’s hard to get an interest rate above 1% on a savings account.

It’s a diabolical problem. But that’s why I think a great possible solution is investing in ASX dividend shares. Dividend-paying shares can help your portfolio produce a cash yield vastly superior to ‘safer’ investments like cash and bonds. So here are 2 ASX dividend shares I believe should be considered over term deposits for income today.

2 ASX dividend shares for income

Coles Group Ltd (ASX: COL)

Coles is a name I’m sure we’d all be fairly familiar with. However, I have admired what this company has pulled out of its hat in 2020 for its shareholders. Coles has been able to actually grow its dividend in 2020, partly thanks to the record sales it has seen in light of the pandemic (which Coles reaffirmed this morning). Since Coles sells groceries and other household essentials, I think the stability and defensiveness it can bring to a dividend portfolio is of great value.

On current prices, Coles is now offering a trailing dividend yield of 2.24%, which grosses-up to 4.63% with Coles’ full franking. Not bad for a 2020 blue chip share, in my view.

Telstra Corporation Ltd (ASX: TLS)

I believe Telstra is another top ASX dividend share to consider today. This company — the ASX’s largest telco — has been having a rough time of late, with the Telstra share price currently (at the time of writing) near an all-time low at $2.72. Investors have been fleeing Telstra, worried about its post-nbn growth prospects and whether declining earnings will lead to a dividend cut.

Even so, I think Telstra is a top income share today. The company has paid 16 cents per share in dividends in 2020, and has recently all-but-confirmed it will do so again in 2021. If that does come to pass, it means Telstra is offering a forward dividend yield of 5.88% today, or 8.4% grossed-up with Telstra’s full franking.

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Click Here For Your Free Stock Report

Returns As of 6th October 2020

More reading

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET. 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 post Beat low interest rates with these 2 ASX dividend shares appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!