Blue chip ASX shares offering fully franked dividends have proven time and again to be great wealth creators.

Aside from the hotly debated topic of negative gearing, few investments could provide the return potential and tax-effectiveness of fully franked dividend shares. That’s especially true when investments are combined with a Self Managed Superannuation Fund (SMSF), in which tax rates are already low. It’s better again when you consider capital gains tax is cut in half after 12 months of holding the shares.

Of course, successful share market investing requires more than just picking the shares with the biggest dividends. Indeed, it’s vital to understand what you’re actually getting when you buy shares in an ASX-listed company. Just like you would research a new investment property before buying, you need to do your homework on the shares.

3 blue-chip ASX shares with fully franked dividends

Three blue-chip shares that are likely at the top of every ASX SMSF investor’s watchlist are Telstra Corporation Ltd (ASX: TLS), Wesfarmers Ltd (ASX: WES) and Medibank Private Ltd (ASX: MPL).

Telstra Corporation – Gross dividend yield: 8.7%

At the current Telstra share price of $5.07, the $62 billion telecommunications heavyweight yields 8.7% grossed up. Telstra continues to dominate many legacy telco markets like pay-tv, fixed communications and mobiles. However, investors hoping to hold Telstra shares for the long term should consider the rapidly changing market dynamics, where Telstra can or should fit in that market and whether that makes it worth less or more than today’s share price.

Wesfarmers Ltd – Gross dividend yield: 7.2%

This old school conglomerate has gone from strength to strength in recent years, dominating rival Woolworths Limited (ASX: WOW) across almost every reporting line. Wesfarmers is the owner of Coles, Bunnings Warehouse, Officeworks, Kmart and more. The company’s strength and potential, however, is well known by share market investors. Therefore, it’s unlikely investors will get the opportunity to buy its shares at bargain prices anytime soon.

Medibank Private – Gross dividend yield: 5.41%

Medibank Private, like Wesfarmers and Telstra, is a market leader. As it stands, the company is likely to benefit from industry tailwinds and the opportunity to slash costs. Though as is the case for Wesfarmers, Medibank shares appear robustly priced, and the chances of buying it cheap are slim.

Foolish takeaway

Big brands and big dividend yields are on offer from these three ASX blue chip shares. However, it’s important to consider the risks and valuation of each business before buying in.

Personally, I’m holding off buying any of these companies at today’s share prices.

The MOTLEY FOOL's #1 stock idea for 2016 - free!

Our expert analysts recently hand-picked their top technology stock idea for 2016. And it's easy to see why: It has a big dividend yield, is growing rapidly and has heaps of cash on its balance sheet. Best of all: their top stock pick of 2016 is yours free! Just click here, enter your email address, and we'll send you their research report. No credit card details or payment required.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

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.

Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen welcomes -- and encourages -- your feedback on Google+, LinkedIn or you can follow him on Twitter @ASXinvest.

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 has no position in any of the stocks mentioned. 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.