With interest rate cuts on the horizon, we may have already seen the peak yields for term deposits.
In light of this, income investors may be better off looking for superior options on the share market instead.
But which ASX dividend shares could be good alternatives to term deposits? Let's take a look at three:
Origin Energy Ltd (ASX: ORG)
Goldman Sachs thinks that Origin Energy could be an ASX dividend share to buy.
It likes the energy giant for a number of reasons. One of those is the earnings diversification provided by its APLNG business. It expects this business to support strong free cash flow and returns while electricity markets remain volatile.
For example, Goldman Sachs is forecasting fully franked dividends per share of 48 cents in FY 2025 and then 58 cents in FY 2026. Based on its current share price of $9.72, this would mean dividend yields of 4.9% and 6%, respectively.
The broker currently has a buy rating and $10.75 price target on its shares.
Telstra Group Ltd (ASX: TLS)
Another ASX dividend share that Goldman Sachs rates highly is telco giant Telstra.
It was pleased with its performance in FY 2024 and expects more of the same in the coming years. This is thanks to Telstra's mobile business, which the broker thinks will underpin low risk earnings and dividend growth.
It has pencilled in fully franked dividends of 19 cents per share in FY 2025 and then 20 cents per share in FY 2026. Based on the current Telstra share price of $3.96, this represents dividend yields of 4.8% and 5%, respectively.
Goldman has a buy rating and $4.35 price target on the company's shares.
Transurban Group (ASX: TCL)
Over at Bell Potter, its analysts think that Transurban could be an ASX dividend share to buy. It is a leading toll road operator with a collection of important assets across Australia and North America.
Bell Potter likes Transurban due to its low risk cash flow and significant growth pipeline. In respect to the former, it highlights that "TCL provides low risk cash flows over the long term, with long concession duration (30+ years), and relative traffic/income resilience."
The broker expects this to support dividends per share of 65 cents in FY 2025 and then 72 cents in FY 2026. Based on its current share price of $13.90, this will mean yields of 4.7% and 5.2%, respectively.
Citi has a buy rating and $14.20 price target on Transurban's shares.
