At present, income investors can earn a 4.35% yield on a 12-month term deposit from Commonwealth Bank of Australia (ASX: CBA).
While this is a good yield, it may not be around for long. That's because the market is expecting the Reserve Bank of Australia to cut rates in the near future.
In fact, according to cash rate futures, the market is pricing in a cut from 4.35% today to 3.25% by the end of next year.
It is quite likely that term deposit rates will fall in line with this, which means that income investors may have to look elsewhere if they want 4%+ yields in the future.
But don't worry, there are a large number of ASX dividend shares that are forecast to provide superior yields in the coming years. Let's take a look at three buy-rated shares:
Clearview Wealth Ltd (ASX: CVW)
Morgans thinks that Clearview Wealth could be a good ASX dividend share to buy. It is a life insurance business that partners with financial advisers to help Australians protect their wealth.
The broker believes the company's transformation program will underpin strong earnings per share growth and big dividends over the coming years. As a result, it has put an add rating and 81 cents price target on its shares.
In respect to dividends, the broker is forecasting fully franked dividends of 3.6 cents per share in FY 2025 and 4.3 cents per share in FY 2026. Based on the current Clearview share price of 53 cents, this would mean dividend yields of 6.8% and 8.1%, respectively.
Rural Funds Group (ASX: RFF)
Rural Funds could be an ASX dividend share to buy according to Bell Potter. It is a property company that owns a portfolio of assets across a number of agricultural industries. This includes orchards, vineyards, water entitlements, cropping, and cattle farms.
Bell Potter has a buy rating and $2.50 price target on its shares.
As for income, it is forecasting dividends per share of 11.7 cents in FY 2025 and 12.2 cents in FY 2026. Based on the current Rural Funds share price of $1.96, this will mean yields of 6% and 6.2%, respectively.
Telstra Group Ltd (ASX: TLS)
Another good alternative to term deposits could be telco leader Telstra.
That's the view of analysts at Goldman Sachs, which believe the company's key mobile business will underpin solid earnings and dividend growth in the coming years. Goldman has a buy rating and $4.35 price target on its shares.
The broker expects this to underpin 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 $3.86, this represents dividend yields of 4.9% and 5.2%, respectively.
