Looking to earn a great income in 2016?

With interest rates sitting at 2%, and possibly going lower, fully-franked, dividend-paying shares are your best bet.

That sounds easy, but it’s not as simple as investing in the Big Four banks or major miners anymore. The banks are facing years of slower growth while resources are in the doldrums as well.

Instead, here are three great ways to earn a reliable dividend income in 2016 and beyond.

3 Fully Franked Dividend Shares to Boost Your Returns

Insurance Australia Group Limited (ASX: IAG) is a general insurance business, operating throughout Australia, New Zealand and Asia. Its long-term growth prospects and fat, fully franked dividend yield even attracted the attention of Warren Buffett, whose company now owns 3.7% of IAG.

At its current price, investors could receive a 5.6% fully franked dividend yield which grosses to 8%. You certainly won’t find that in any term deposit…

Retail Food Group Limited (ASX: RFG) is the master franchisor of businesses including Gloria Jean’s, Donut King and Crust Pizza, to name a few. The franchisees fund much of the growth and pay RFG a percentage of their revenues – not their profits – providing a steady stream of income.

Earnings have grown strongly over the last nine years, and so have the dividends. RFG currently offers a 5.5% fully franked dividend yield.

As Australia’s biggest telco, Telstra Corporation Ltd (ASX: TLS) needs no introduction. However, the company is also expanding its Asian presence, boosting its investment spend on new big-growth technologies while its services and infrastructure are also key to the data boom (think Netflix and other machine-to-machine communications).

To top it off, Telstra offers one of Australia’s best and most reliable dividends. At $5.59, it trades on a 5.5% fully franked yield.

The Motley Fool's TOP Dividend Stock for 2016

As with Insurance Australia Group and Retail Food Group, Telstra could be  a great way to beat low interest rates in 2016.

However, our expert analysts have just published a new FREE report, The Motley Fool's Top Dividend Stock for 2016, where they name their hands-down BEST dividend stock for 2016.

Not only does this company offer resilient earnings, attractive growth potential and a fat, fully franked dividend yield, it also has the potential to generate considerable capital appreciation in 2016 and beyond.

Simply click here to gain access to this comprehensive FREE research.

OUR #1 DIVIDEND PICK FOR 2016...

Forget BHP and Woolworths. This "dirt cheap" company is growing like gangbusters, and trading on a 5.6% dividend yield, FULLY FRANKED (8% gross). With interest rates set to stay at these low levels for years to come, for hungry investors, including SMSFs, this ASX company could be the "holy grail" of dividend plays for 2016.

Enter your email below to discover the name, code and a full investment analysis in our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2016.”

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Netflix. Motley Fool contributor Ryan Newman owns shares of Netflix and Retail Food Group Limited. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia owns shares of Retail Food Group Limited. 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 Bruce Jackson.