While interest rates could rise in 2026, they are still expected to remain lower than historical levels for the foreseeable future.
In light of this, term deposits are once again looking less attractive for income-focused investors. And while they offer certainty, they also cap returns and provide no opportunity for income growth or capital appreciation.
By contrast, ASX dividend shares can deliver regular income, potential dividend growth, and upside if the underlying business performs well.
For investors prepared to tolerate some share price volatility, they can be a far more powerful long-term income tool than cash in the bank. But which ones could be buys?
Here are three ASX dividend shares that analysts think could be worth considering instead of a term deposit.
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Charter Hall Retail REIT (ASX: CQR)
Charter Hall Retail REIT could be a strong option for investors seeking reliable income. The property trust owns a diversified portfolio of convenience-based retail centres anchored by supermarkets, service stations, and essential services.
These types of assets tend to be highly defensive, as shoppers continue to spend on groceries and everyday necessities regardless of economic conditions. Long lease terms and high-quality tenants provide visibility over rental income, which in turn supports consistent distributions to unitholders.
Citi rates its shares as a buy with a $4.50 price target. As for income, it is forecasting dividends per share of 25.5 cents in FY 2026 and then 26 cents in FY 2027. Based on its current share price of $4.10, this would mean dividend yields of 6.2% and 6.3%, respectively.
Elders Ltd (ASX: ELD)
Another ASX dividend share to look at is Elders. It could be good option for income investors that are comfortable with some cyclical exposure. The agribusiness provides rural and livestock services, agricultural inputs, and real estate services to Australia's farming sector.
While its earnings can fluctuate with seasonal conditions, Elders has built a diversified national footprint that helps smooth performance across cycles. Strong agricultural demand and disciplined cost management have also supported solid cash generation in recent years.
Macquarie is a fan and has an outperform rating and $8.25 price target on its shares.
With respect to dividends, the broker is forecasting fully franked payouts of 36 cents per share in FY 2026 and then 37 cents per share in FY 2027. Based on its current share price of $6.97, this would mean dividend yields of 5.1% and 5.3%, respectively.
Harvey Norman Holdings Ltd (ASX: HVN)
Harvey Norman has long been a favourite among ASX income investors, and it isn't hard to see why. The retailer benefits from a unique franchise model that generates robust cash flows and provides flexibility during challenging retail environments.
In addition to its core electronics and furniture operations, Harvey Norman owns a substantial property portfolio, which adds another layer of income stability. This combination of retail earnings and property exposure has supported generous dividend payments over time.
Bell Potter, which has a buy rating and $8.30 price target on its shares, expects fully franked dividends per share of 30.9 cents in FY 2026 and 35.3 cents in FY 2027. Based on its current share price of $6.92, this represents dividend yields of 4.5% and 5.1%, respectively.
