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3 high-yield ASX dividend shares to replace your term deposit

With the Reserve Bank of Australia (RBA) cutting interest rates 3 times this year so far (with a possible 4th Melbourne Cup cut on the cards), it’s a bleak time for any savers out there. With a current cash rate of just 0.75% (a record low), cash instruments like savings accounts, term deposits and even government bonds are now barely breaking even with inflation.

That leaves ASX dividend shares as one of the best places to find yield in today’s money markets. So here are 3 that I think are looking hot for income investors today.

Australia and New Zealand Banking Group (ASX: ANZ)

An ASX income portfolio wouldn’t be spiritually complete without at least one of our ASX banks, and I think ANZ is looking nicely valued on today’s prices. Although ANZ shares have climbed 16% in 2019 so far, today’s price of $27.75 (at the time of writing) is still a ways off the 52-week high of $29.30.

This price also means ANZ shares are offering a 5.77% starting dividend yield (7.49% grossed-up), which beats any ANZ term deposit handsomely.

Duxton Water Ltd (ASX: D2O)

Duxton is the only ASX company directly exposed to water as a resource/commodity – the company leases water entitlements to farmers and other agricultural businesses. With drought gripping much of our rural farmland today and given the effects of climate change will only make water scarcity a more pressing issue in the future, this company might be a great long-term buy-and-hold investment.

Duxton pays a 3.83% dividend yield on current prices, or 5.47% grossed-up.

Sydney Airport Holdings Pty Ltd (ASX: SYD)

Sydney Airport is one of those rare businesses that’s allowed to operate as a quasi-monopoly, making it a great investment. Although Sydney’s second airport at Badgery’s Creek is currently being built, I think SYD shares will continue to generate massive returns for its shareholders well into the future, considering its Sydney-centric location.

SYD shares are currently paying a 4.51% dividend yield.

Foolish takeaway

In my view, these 3 ASX dividend shares are amongst the best income stocks available on the market. I think ANZ and Duxton are the most attractively priced today, but Sydney Airport has been a lucrative investment over the past decade and I expect it will continue to be so.

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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Sydney Airport Holdings Limited. The Motley Fool Australia has recommended DUXTON FPO. 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.

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