At present, Westpac Banking Corp (ASX: WBC) is offering investors interest rates of just 0.35% per annum on five-year term deposits. This is broadly in line with what the rest of the banks are offering.
This means that even if you put $100,000 into them, you would earn interest of just $350 each year.
The good news is that there are a great number of dividend shares on the Australian share market that offer significantly better yields. Two such examples are listed below:
Accent Group Ltd (ASX: AX1)
Accent is the leading footwear retailer behind a number of popular store brands. This includes HYPE DC, Platypus, The Athlete’s Foot, and Sneaker Lab. It has also recently launched two new store brands despite the pandemic – Australian Stylerunner and Pivot. The good news is that these new stores have been materially outperforming expectations since opening. This bodes well for its bold expansion plans over the coming years.
Analysts at Morgan Stanley believe the company is well-placed to reward shareholders with dividends in FY 2021. The broker is forecasting a fully franked dividend of 9.4 cents per share. Based on the latest Accent share price, this represents a 4.3% dividend yield.
Rural Funds Group (ASX: RFF)
Rural Funds is an agricultural property-focused real estate investment trust (REIT) which owns a diversified portfolio of high quality assets. These assets are leased to experienced agricultural operators such as wine giant Treasury Wine Estates Ltd (ASX: TWE) on very long leases.
At the end of FY 2020, the company owned 61 properties with a combined value of $1 billion and a weighted average lease expiry (WALE) of 10.9 years. From this, it was generating adjusted funds from operations (AFFO) of 11.7 cents per share.
Thanks to fixed rental increases, the company intends to grow its distribution by its 4% per annum target rate in FY 2021. This will mean an 11.28 cents per share distribution for shareholders. Based on the current Rural Funds share price, this works out to be a 4.6% yield.