2 ASX dividend shares with fully franked yields over 7% today

Fortescue Metals Group Limited (ASX: FMG) is one of the 2 ASX dividend shares on offer today with a grossed-up yield of 7% or more.

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One of the few certainties we have going into 2021 is the continuing futility of traditional cash and fixed-interest investments. Even for term deposits these days, the best interest rate you can expect will likely come in with a yield at less than 1% per annum.

That's a very large price to pay for the certainty of income and capital preservation that these investments provide. And it doesn't look like this is set to get any better any time soon. The Reserve Bank of Australia (RBA) has said that it doesn't expect interest rates to start rising again until 2023 at the earliest.

So what to do? Well ASX dividend shares are a good place to start. Yes, dividend shares don't offer the guaranteed return that a term deposit does. But they do offer the chance of getting a dividend yield of more than 1% per annum.

Here are 2 ASX shares doing one better. They both have yields on the table today that gross-up to more than 7%.

Fortescue Metals Group Limited (ASX: FMG)

Fortescue has been one of the surprise performers of 2020 so far. Since the start of the year, Fortescue shares have risen from around $10.78 a share to today's price (at the time of writing) of $23.42. That's a handy 117% return that Fortescue shareholders have enjoyed.

A surging iron ore price in 2020 has loaded Fortescue's coffers with cash. And Fortescue has been returning a lot of it to investors this year. Even after this meteoric share price appreciation, Fortescue shares are still offering a trailing yield of 7.51% on current prices. With full franking credits, that grosses-up to 10.73%.

Alumina Limited (ASX: AWC)

Our second dividend share today is aluminium/alumina producer Alumina Limited. Alumina is one of the largest pure-play aluminium companies on the ASX.

Alumina recently told investors that the company saw strong earnings growth in its aluminium division in its most recent quarter, up 35% to $119 million. No doubt investors who buy Alumina shares for dividend income would have been pleased.

The company boasts a trailing yield of 5.2% on current prices, which grosses-up to 7.43% with Alumina's full franking. It could get even better from here too.

My Fool colleague Brendon Lau recently covered how one broker sees Alumina shares offering a yield of 13.6 cents a share by FY2022. That would net a yield of around 7.5% (or 10.71% grossed-up) on current prices.

Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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