Times really are hard for income investors following a series of cash rate cuts over the last few years.
At present, a 60-month term deposit from Commonwealth Bank of Australia (ASX: CBA) will yield just 0.70% per annum on amounts of $50,000 or greater.
This means that a $50,000 investment will provide investors with interest of just $350 per year.
The good news is that the Australian share market is home to a large number of companies that offer far greater yields for investors.
Two ASX dividend shares with yields above 4.5% are listed below:
BHP Group Ltd (ASX: BHP)
This mining giant is the owner of a collection of world class, low cost assets which are generating significant free cash flows. This is certainly the case at the moment thanks to high iron ore and copper prices. And given the company's penchant for returning excess free cash flow to shareholders, this bodes well for dividends in FY 2021.
In fact, analysts at Macquarie are forecasting that BHP will pay a ~$2.80 per share fully franked dividend this year. Based on the current BHP share price, this would mean a very generous 7.8% dividend yield.
Rural Funds Group (ASX: RFF)
Rural Funds is an agriculture-focused property group that owns a large number of properties across several agricultural sectors. These high quality properties are leased on long term agreements to some of the biggest operators in the industry such as wine giant Treasury Wine Estates Ltd (ASX: TWE). At the end of FY 2020, Rural Funds had a weighted average lease expiry (WALE) of 10.9 years.
And with these leases having rental increases built into them, the company has great visibility on its future earnings. This means it can provide distribution guidance to investors even during these volatile times. In FY 2021 the company intends to increase its distribution to 11.28 cents per share. Based on the current Rural Funds share price, this works out to be a 4.6% yield.
