Earlier this week a quarterly survey of economists by the AFR found that the median forecast for a cash rate hike to 1.75% has been pushed back from the second half of 2019 to June 2020.
If this proves accurate it will mean that the cash rate stays at the record low of 1.5% for another 18 months.
In light of this, it looks like the paltry interest rates on offer from savings accounts and term deposits are here to stay for some time to come.
The good news is that the Australian share market is home to a large number of shares offering dividend yields that smash these interest rates.
Three to consider are as follows:
Australia and New Zealand Banking Group (ASX: ANZ)
In a matter of weeks the Royal Commission final report will be released, bringing to an end the saga that has plagued the big four banks for the last 12 months. I’m optimistic that the report will not include anything that has not already been priced in, potentially making bank shares an attractive option today. Especially given the low multiples they trade on and the above-average dividend yields they offer. I think ANZ Bank’s shares are a good option thanks to their trailing fully franked 6.6% yield.
National Storage REIT (ASX: NSR)
Thanks to its network of centres and strong demand for its services, I believe this leading self-storage provider is well positioned to grow its distribution at a solid rate over the coming years. In addition to this, the company recently raised $175 million through an equity raising. These funds will be used to reset its balance sheet, accelerate its acquisition and development pipeline, and position it for future growth opportunities. At present the company’s units provide a trailing 5.5% distribution yield.
Rural Funds Group (ASX: RFF)
Rural Funds is an agriculture-focused real estate property trust which I think could be a great option for income investors. Due to its diverse portfolio of assets which are generating an increasing amount of rental income thanks to long-term tenancy agreements which have rental indexation built into them, I believe it is well positioned to continue increasing its dividend at a decent rate over the coming years. Rural Funds’ units currently offer a trailing 4.7% yield.
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended National Storage REIT. 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.