Next year Credit Suisse has tipped the Reserve Bank of Australia to cut interest rates from the record low of 1.5% all the way down to 1%.
Whilst this would be good news for borrowers, it certainly isn't for savers and retirees who live off the interest provided by savings accounts and term deposits.
But thankfully for these retirees the Australian share market has a number of high-quality dividend shares that I believe are far better options than term deposits. Here are three to consider:
ASX Ltd (ASX: ASX)
As the operator of the Australian Stock Exchange this company enjoys an almost monopoly like status which I find very appealing. In my opinion this puts ASX Ltd in a great position to continue to grow both its earnings and its dividend at a solid rate for the foreseeable future. This makes it an ideal addition to a retirement portfolio. Especially with its shares forecast to provide investors with a fully franked 4.1% dividend in FY 2017 according to CommSec.
Coca-Cola Amatil Ltd (ASX: CCL)
Thanks to its unrivalled distribution network and deep pockets, I believe Coca-Cola Amatil will be able to adjust to the ever-changing habits of consumers. Sugary drink sales may be falling, but I believe its healthier options, coffee, alcohol, and energy drink offerings will more than offset this decline in the years ahead. Furthermore, at long last the company's Indonesian business is starting to find its feet and recently announced a 65% jump in half-year earnings. At present Coca-Cola Amatil's shares are expected to provide a partially franked 4.8% dividend in FY 2017.
Flight Centre Travel Group Ltd (ASX: FLT)
Underwhelming full year profit guidance has led to this leading travel agent's share price falling 22% year to date. As a result its shares are changing hands at just 13x estimated FY 2017's earnings and are expected to yield a fully franked 4.7% over the next 12 months. The guidance management provided was for underlying profit after tax of between $320 million and $355 million. This will be at best flat on last year's result and at worst 9% lower year on year. So it isn't too much of a surprise to see its shares fall lower. But I believe the cost controls being rolled out globally and its expansion into key markets through acquisitions will result in a return to profit growth in FY 2018. For this reason I believe it is an opportune time to invest.
