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Replace your term deposit with these ASX dividend shares

Do you want to replace your term deposit with these ASX dividend shares?

I can totally understand why you’d want to do that. If you had $1 million to invest in term deposits you’d probably be getting less than 2% today, which is less than $20,000 per year.

Unless you’re happy to lower your lifestyle or eat into the capital, term deposits just aren’t going to cut it.

However, if you were originally in term deposits I would guess that relative safety is a preferred element of shares.

No share is impervious from share price falls, but shares will hopefully go up over the long-term too. However, I think that these shares in-particular are options to replace a term deposit on the income side of things:

Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) is an investment conglomerate, it has a grossed-up dividend yield of 4.1% and it has increased its dividend every year since 2000.

APA Group (ASX: APA) is an energy infrastructure business, it has a distribution yield of 4.6% and it has increased its distribution every year for the past 15 years.

WAM Research Limited (ASX: WAX) is a listed investment company (LIC), it has a grossed-up dividend yield of 9.7% and it has increased its dividend each year since the GFC.

Growthpoint Properties Australia Ltd (ASX: GOZ) is a real estate investment trust (REIT), it has a distribution yield of 5.5% and it has increased its distribution each year since it started paying one a decade ago.

Rural Funds Group (ASX: RFF) is another REIT, it has a distribution yield of 5.5% and it has increased its distribution each year since it started paying one in 2014.

All of the above shares have income increases going back to since their inception, or to at least to back the GFC for some of the older ideas. That’s a pretty reassuring track record in my book.

Foolish takeaway

Out of the above names, I have put a sizeable part of my portfolio in Soul Patts shares in recent times. It has a great long-term track record of beating the market, with conservative and contrarian focused management – I think it would be a very promising idea to replace your term deposit and improve your income.

Where to invest $1,000 right now

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.

*Returns as of June 30th

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED and Washington H. Soul Pattinson and Company Limited. 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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