As anyone who keeps their eye on ASX shares would know, last week the Reserve Bank of Australia (RBA) cut interest rates to a new record low of 0.75%.
I've already checked my savings account and my new rate is about 1.75% per annum – pretty disheartening. It's now going to be very hard to find a term deposit that will pay you 2% or more just to keep up with inflation.
So with the death of cash as a real investment, ASX dividend shares might be a better place to turn. Here are 2 ASX dividend shares that have yields over 9% that you might want to consider instead!
National Australia Bank Ltd (ASX: NAB)
NAB is of course one of our big four ASX banks, and by virtue of this pedigree offers a big juicy dividend – 6.5% on current prices, which means it is yielding 9.26% if you include franking credits.
I like NAB the best out of the ASX banks at the moment. The appointment of new CEO Ross McEwan is a great move from the bank in my opinion and looks likely to steer NAB in a more profitable direction. NAB also cut its dividend earlier this year, so I think it is one of the more sustainable banking yields going forward.
Just keep in mind that NAB shares are offering more than four times what a NAB term deposit will net you!
WAM Research Ltd (ASX: WAX)
WAM Research is a Listed Investment Company (LIC) with a stellar track record of dividend payments. WAX invests in small- to mid-cap companies on the ASX and has delivered a return of 16.4% per annum since 2010.
It uses the profits from these investments as well as the dividends it receives to pay a healthy yield – which is sitting at 6.98%, or 9.97% grossed-up with franking. Probably due to this impressive yield, WAX shares usually trade at a premium to its underlying net tangible assets (NTA). So today, you can pick up a WAX share for $1.39, but you're really buying $1.20 worth of assets.
Although this may put many investors off, if you're a yield-seeker, WAM Research could well be worth this premium.
Foolish takeaway
I think every investor should be looking for high-quality ASX dividend shares in this era of low interest rates. After all, your cash is almost better being under your mattress these days than in a bank, and in my view, dividend shares are better than both!
