The current introductory interest rate on a Commonwealth Bank of Australia (ASX: CBA) savings account stands at 2.55%.
However, this variable interest rate drops to a paltry 0.5% after five months when the introductory offer period ends.
It's a similar story with the Westpac Banking Corp (ASX: WBC) eSaver account as well. It starts at 2.51% and then drops to 0.5% after five months.
In light of this, I think savers ought to consider skipping savings accounts in favour of the many quality dividend options on offer on the local share market.
Here are three dividend shares that smash interest rates:
BHP Group Ltd (ASX: BHP)
Excluding the mining giant's special dividend which will be paid to eligible shareholders at the end of the month, BHP's shares currently offer a trailing fully franked 4.9% yield. The good news is that with management reiterating its full year production and unit cost guidance this week, BHP appears to be well-positioned to increase its dividend again in FY 2019 thanks to the high levels of free cash flow it is generating from its world class operations. I think this makes it a great option for income investors.
Coles Group Ltd (ASX: COL)
I think that this supermarket giant could be another great option for income investors due to its defensive qualities and dividend potential. Since its demerger from Wesfarmers Ltd (ASX: WES), Coles has yet to reveal its dividend plans for FY 2019. However, a broker note out of the Macquarie equities desk late last year revealed that its analysts expect it to pay a fully franked dividend of 65.7 cents per share. This would mean a dividend yield of 5.1% based on its last close price.
National Storage REIT (ASX: NSR)
One of my favourite income options on the Australian share market right now is this self storage centre operator. I believe National Storage is well-positioned to continue increasing its dividend at a solid rate over the coming years following its recent equity raising. The funds raised will be used to reset its balance sheet and fund acquisitions and its development pipeline. At present National Storage's shares offer a trailing 5.4% distribution yield.
