Although many economists now believe that the next move for Australian interest rates will be a move higher, very few expect a rate hike any time soon.
This is disappointing news for savers and investors using term deposits, as the paltry interest rates on offer look unlikely to improve in the near future.
Thankfully for savers, the local share market has a number of quality high-yield dividend options to save the day.
Here are two to consider:
Telstra Corporation Ltd (ASX: TLS)
The telco behemoth is certainly dividing opinion at the moment. While some believe that a dividend cut to 22 cents is easily sustainable, others believe it may still have to go lower. I think that 22 cents per share is doable for Telstra for the foreseeable future, especially with its plan to return 75% of one-off NBN receipts to shareholders over the next few years. Based on 22 cents per share, Telstra will provide shareholders with a fully franked 6.1% dividend in FY 2018.
Westpac Banking Corp (ASX: WBC)
I would much rather invest in Australia's oldest bank and receive a trailing fully franked 5.9% dividend than have my money in one of its savings accounts. While there are concerns that the banks may be forced to cut their dividends due to the bank levy, I believe that out of cycle rate rises will help offset this headwind and allow Westpac to at least maintain its current pay out. This could make it one of the better dividend options on the market right now.
