If you're not happy with the interest rates on offer with savings accounts and term deposits, then you might want to consider buying one of the dividend shares listed below.
I estimate that these dividend shares offer FY 2021 yields that are among the most generous on the market. Here's why I like them:
Commonwealth Bank of Australia (ASX: CBA)
If you don't have meaningful exposure to the banking sector, then I think it would be well worth considering an investment in Commonwealth Bank. Especially given how the banking giant's shares are trading 22% lower than their 52-week high. While a decline in the CBA share price is certainly not unwarranted, I believe the extent of its decline has been overdone and feel confident that the coronavirus provisions it has made are more than sufficient.
In light of this, while I expect a dividend cut in FY 2021, I don't believe the cut will be as severe as some expect. I forecast a fully franked dividend in the region of $3.70 per share next year. This would be a generous 5.2% dividend yield based on the current Commonwealth Bank share price.
Sydney Airport Holdings Pty Ltd (ASX: SYD)
Another high yield ASX dividend share to consider buying is Sydney Airport. While I wouldn't necessarily expect a final dividend from the airport operator in the second half of FY 2020, I'm optimistic that the domestic travel market will have recovered enough in 2021 to support a decent dividend payment. Just as long as the situation in Victoria doesn't escalate and spread into other states.
At present, I estimate that Sydney Airport will pay a dividend in the region of 29 cents per unit next year. Which, based on the latest Sydney Airport share price, represents a 5.4% FY 2021 dividend yield.
