At present, the base interest rates on savings accounts from Westpac Banking Corp (ASX: WBC) are an ultra-low 0.05%.
With rates as low as this, it is near impossible to generate a sufficient income from them.
So, if you're an income investor, I would suggest you skip savings accounts and look to the share market. Especially given the good number of quality dividend shares you'll find there.
But which ASX dividend shares should you buy? Two that I like are listed below:
Accent Group Ltd (ASX: AX1)
I think that Accent Group would be a great option for income investors. It is the footwear-focused retail group responsible for popular store brands such as The Athlete's Foot, HYPE DC, and Platypus. Accent Group has been a very positive performer over the last few years and even during the pandemic. This has been driven by the popularity of its exclusive brands and its growing online business. The latter was incredibly important during the height of the pandemic.
The good news is that I'm confident these positive trends will drive further growth in the coming years. This should be supported by its expansion plans. For now, I'm forecasting Accent to pay a 9 cents per share fully franked dividend in FY 2021. Based on the current Accent share price, this equates to a generous 5.2% dividend yield.
Vanguard Australian Shares High Yield ETF (ASX: VHY)
Another top option for income investors to consider buying is the Vanguard Australian Shares High Yield ETF. I think this would be perfect for investors that don't have the funds required to build a truly diverse income portfolio.
This is because the Vanguard Australian Shares High Yield ETF provides investors with exposure to 66 of the highest yielding shares on the Australian share market. This diverse group of shares include the likes of BHP Group Ltd (ASX: BHP), Coles Group Ltd (ASX: COL), Fortescue Metals Group Limited (ASX: FMG), Telstra Corporation Ltd (ASX: TLS), and Westpac and the rest of the big four banks. I estimate that its units offer a FY 2021 dividend yield in the range of 4% to 5%.
