Interest rates could be at ultra low levels for years, so buy this ASX dividend share

Westpac Banking Corp (ASX:WBC) expects interest rates to remain at ultra low levels for some time to come, so buy these ASX dividend shares…

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It has been a tough few years for income investors who have had to contend with ultra low rates.

Unfortunately, according to the economics team from Westpac Banking Corp (ASX: WBC), it could still be some time before rates start to improve.

What did Westpac say?

According to the latest Westpac Weekly economic report, the bank is forecasting the cash rate to stay on hold at 0.1% until at least the end of 2022.

And given how rate increases are likely to be gradual when they finally happen, it could be several more years before rates get back to previous levels.

In light of this, it looks as though dividend shares will remain the best way to generate a passive income for some time to come.

But which dividend shares should you buy? One highly rated ASX dividend shares is named below:

Telstra Corporation Ltd (ASX: TLS)

Telstra is a dividend share that a large number of brokers are rating as buys right now. They appear to believe the worst is behind the telco giant after a number of years of struggles because of the NBN rollout.

This is especially the case given the success it is having at cutting costs and simplifying its business with the T22 strategy. Furthermore, the arrival of 5G internet, the easing of the NBN headwind, and the company's proposal to split into three separate entities are being seen as big positives for Telstra's prospects.

Goldman Sachs is a big fan of the company and recently reiterated its buy rating and $3.60 price target on its shares.

It has also reaffirmed its forecast for a 16 cents per share fully franked dividend in FY 2021 and beyond. Based on the current Telstra share price of $3.02, this would provide investors with a generous fully franked 5.3% dividend yield.

Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia owns shares of and has recommended Telstra Limited. 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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