On Tuesday the Reserve Bank met for the second time of the year to decide on the cash rate.
Although cash rate futures were hinting that there was a possibility of a cut to zero, the central bank held firm and kept rates on hold at 0.1%.
What now?
While this is a small win for income investors, it doesn't do much for them in the grand scheme of things. Term deposits and savings accounts remain at ultra low levels and show little sign of lifting from here in the next couple of years.
In light of this, it looks set to remain difficult for investors to generate sufficient income from these assets for some time to come.
But never fear, the Australian share market is home to a number of dividend shares that offer yields that smash those on offer with term deposits.
Among those shares are the big four banks. Here's why income investors might be better off with their shares rather than their term deposits or savings accounts.
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
Analysts at Morgans expect ANZ to pay a dividend of $1.45 per share in FY 2021 and then $1.61 per share in FY 2022. Based on the current ANZ share price of $26.97, this represents yields of 5.4% and 6%.
Commonwealth Bank of Australia (ASX: CBA)
Ord Minnett is forecasting dividends of $3.20 per share and $3.60 per share over FY 2021 and FY 2022, respectively. Based on the latest CBA share price, this equates to fully franked yields of 3.8% and 4.25%.
National Australia Bank Ltd (ASX: NAB)
As for NAB, UBS is expecting dividends of $1.25 per share and $1.40 per share over the next two years. With the NAB share price currently fetching $25.24, this represents yields of 4.95% and 5.5%.
Westpac Banking Corp (ASX: WBC)
Finally, Morgans has also pencilled in dividends of $1.32 per share in FY 2021 and $1.43 per share in FY 2022 from Australia's oldest bank. Based on the latest Westpac share price, this will mean yields of 5.45% and 5.9%.
