With the Reserve Bank of Australia increasing interest rates rapidly over the last 12 months, the yields on offer with term deposits have become a lot more attractive.
For example, Commonwealth Bank of Australia (ASX: CBA) is currently offering interest rates of 4.25% per annum on 12-month term deposits.
However, as attractive as this may be for income investors, it still pales in comparison to what you can find on the Australian share market. Furthermore, term deposits don't provide investors with potential capital returns, unlike ASX dividend shares.
So, with that in mind, listed below are a couple of ASX dividend shares that analysts appear to think could be good alternatives to term deposits right now. They are as follows:
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ANZ Group Holdings Ltd (ASX: ANZ)
Instead of putting money into this banking giant's term deposits, you could potentially get a greater yield from its shares. Goldman Sachs is forecasting fully franked dividends per share of $1.62 in both FY 2023 and FY 2024. Based on the latest ANZ share price of $25.03, this would mean dividend yields of 6.5%.
Goldman has a buy rating and a $27.55 price target on its shares, which implies a potential upside of 10%.
Super Retail Group Ltd (ASX: SUL)
The team at Morgans expects dividend yields that are much bigger than term deposits from this diversified retailer. Its analysts are forecasting the Super Cheap Auto and Rebel owner to pay fully franked dividends per share of 89 cents in FY 2024 and 73 cents in FY 2025. Based on the current Super Retail share price of $11.83, this would mean yields of 7.5% and then 6.2%.
Morgans' add rating and $15 price target also suggests a potential upside of almost 27% for investors.
