ASX bank shares can be considered rather unusual investments on the ASX. It's no secret that many, perhaps even most, ASX investors hold at least one of the big four bank shares in their investment portfolios. Even if not, it's almost certain that banks form a significant portion of any Australians' superannuation fund.
But it's also a reasonable assumption to make that most Australians have a bank account with one of the big four ASX banks as well. Thus, it can be argued that most Australians are getting two streams of income from an ASX bank, even if it's not a big four bank like Commonwealth Bank of Australia (ASX: CBA).
One in the form of dividends from their investments (inside super or out). The other in the form of interest on their deposited savings.
We've recently examined the current dividend yields that ASX investors can expect out of the big four bank shares at present. So today, we'll be checking out what kinds of income investors (and customers) of a few of the lesser ASX bank shares, as well as one big four banks, can expect.
AMP offers rates, but no dividends
The first of those is AMP Ltd (ASX: AMP). So let's get this out of the way first — AMP does not currently pay out a dividend. The financial services company has done so in the past. But the company's recent misfortunes have seen the dividend income dry up, at least for now.
But AMP does offer some interesting interest rates for its customers. At present, the bank currently has a potential interest rate of up to 2.6% per annum available for its AMP Saver product.
Saying that, depositors need to regularly deposit cash monthly to be awarded the higher rate, otherwise the base rate of 0.6% applies. But for investors willing to lock up their funds, AMPs rates for term deposits go as high as 4.4% per annum.
A non-big four ASX bank comes in strong
Turning to Bank of Queensland Ltd (ASX: BOQ), and we have an ASX bank share that does indeed pay a dividend. BOQ's last two dividend payments were worth 22 cents per share each, fully franked. That gives BOQ shares a trailing yield of 6.29% at current pricing.
That's going to be hard for Bank of Queensland's own products to compete with. But in terms of rival products, BOQ's Smart Saver Account is certainly competitive. It offers a maximum interest rate of 3.1% per annum.
But, again, to achieve this, customers need to make monthly deposits of at least $1,000. They also need to make at least five transactions with a linked Everyday account if they don't want to instead get a base interest rate of just 0.05%.
BOQ's term deposit interest rates go as high as 3.3%.
How does ANZ compare?
Let's see how these offerings measure up to a big four ASX bank. So, time to check out Australia and New Zealand Banking Group Ltd (ASX: ANZ). ANZ shares currently offer a dividend yield of 6.32%. That comes from ANZ's last two dividend payments. These were worth 72 cents per share each, fully franked.
Again, that leaves ANZ's depositor rates in the dust. The highest interest rate ANZ offers on a savings account is presently 1.65% with the ANZ Progress Saver. But customers need to make one deposit of at least $10 or more in the month, with no withdrawals. Otherwise, the base rate is 0.01%.
ANZ's term deposits do go a little higher. The highest rate customers can expect to enjoy at present is 3% per annum.
So some real disparities here between BOQ, ANZ and AMP. Both in terms of dividends and interest rates. All customers and investors should read the fine print, though, and work out what product might be best for them. But this comparison does show that shopping around can well be worth it.
