Unfortunately, with the Reserve Bank of Australia cutting the cash rate this month and expected to make two further cuts later this year, the interest rates on offer with term deposits look likely to become slender and slender.
But don't worry because the share market and ASX dividend shares are here to save the day.
But which shares could be good alternatives for income investors? Let's take a look at three that could be buys:
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Endeavour Group Ltd (ASX: EDV)
The first ASX dividend share that could be a top pick for income investors.
It is the leader in the Australian alcohol retail market with an omnichannel network of more than 1,675 stores, 344 hotels, and scalable digital platforms. This is through brands including BWS and Dan Murphy's. The latter has over 4.5 million active My Dan's members.
The team at Morgan Stanley is positive on Endeavour Group and has an overweight rating and $5.30 price target on its shares.
As for income, it is forecasting fully franked dividends of 19 cents per share in FY 2025 and then 21 cents per share in FY 2026. Based on the current Endeavour share price of $4.06, this will mean dividend yields of 4.7% and 5.2%, respectively.
GQG Partners Inc (ASX: GQG)
Another ASX dividend share that could be superior to a term deposit is GQG Partners.
It is a global investment company managing funds on behalf of large pension funds, sovereign funds, wealth management firms, and financial institutions.
Macquarie thinks that its shares are attractively priced at current levels. It recently noted that "at <9x NTM P/E with a >10% yield, valuation remains attractive." The broker has an outperform rating and $2.90 price target on its shares.
In respect to dividends, Macquarie is forecasting payouts of 14.7 US cents per share (22.8 Australian cents) in FY 2025 and then 16 US cents per share (24.8 Australian cents) in FY 2026. Based on its current share price of $2.12, this would mean dividend yields of 10.75% and 11.7%, respectively.
Rural Funds Group (ASX: RFF)
Finally, Bell Potter thinks Rural Funds Group could be an ASX dividend share to buy.
Rural Funds is a diversified agricultural property company with a portfolio of high-quality assets. including almond orchards, cattle farms, vineyards, macadamia plantations, and more.
Bell Potter believes its shares are cheap at current levels. It recently highlighted that "the 44% discount to market NAV is well above the historical average 5% premium since listing." It has a buy rating and $2.45 price target on its shares.
The broker is expecting dividends per share of 11.7 cents in FY 2025 and then 12.2 cents in FY 2026. Based on its current share price of $1.76, this will mean dividend yields of 6.6% and 6.9%, respectively.
