As most Australians (and all mortgage holders) would know, interest rates have been on a steep upward trajectory over the past two years. This has made paying the mortgage a whole lot harder, but conversely made it easier to make more money from cash investments.
Back in April of 2022, the Reserve Bank of Australia (RBA) still had the cash rate at a record low of 0.1%. But by November 2023, almost monthly increases resulted in a cash rate of 4.35% – the highest interest rates have been in more than a decade.
That's where rates have remained ever since.
But while this steep rise has been painful for mortgagees to bear, it has also resulted in some of the best returns Aussie savers have enjoyed for a decade. Putting your cash in a savings account or a term deposit today can result in receiving an interest rate of over 5% in some cases.
That's not a bad return on your investment. Particularly given cash investments theoretically come risk-free thanks to the Federal Government's bank guarantee (at least for your first $250,000).
However, despite these rate hikes, I still think there is more potential to make more money from ASX dividend shares today than from cash investments
Make money from these two ASX dividend shares
There are two ASX dividend shares today that I think passive income-seeking investors should take stock of if they wish to make more money from their investments.
The first is ASX retail share Super Retail Group Ltd (ASX: SUL). Super Retail is the company behind famous Australian retail names like Rebel, Macpac, Super Cheap Auto, and BCF.
This company has a long and lucrative history of paying fairly hefty dividends. Despite a recent share price runup, Super Retail stock is still trading on a hefty dividend yield of 5.81% right now. So already we're ahead of the money you can expect to make from a term deposit (assuming these dividends continue into the future).
But Super Retail's dividends also typically come with full franking credits attached. This means that this trailing dividend yield grosses up to an even more impressive 8.3% with the value of these franking credits included.
The second stock you might want to look at if you wish to make more money than what a term deposit can offer is Telstra Group Ltd (ASX: TLS).
Telstra is a famous ASX dividend share, with a long history of forking out chunky passive income. If you weren't aware, Telstra is the largest telecommunications provider in Australia, with a clear market lead on both mobile services and fixed-line home internet connections.
Right now, Telstra shares are trading on a dividend yield of 4.96%. But with this company's history of paying full franking credits alongside its dividends, we can assume this yield grosses-up to a happy 7.09% with those franking credits included.
Foolish takeaway
Remember, ASX shares come with a level of risk far higher than that of a cash-based investment. There is never any guarantee that a company will continue to pay out dividends at the levels it has in the past. Plus, there's also the risk of a capital loss when you buy a share as an investment.
However, if you wish to make more money from your cash, dividend shares remain the very best alternative you can ask for.
