There are a number of great ASX shares with high dividend yields worth knowing about. Australian companies can be some of the best options for passive income due to their generous dividend payout ratios and the bonus of franking credits.
We're going to look at two ASX dividend shares with exceptionally high dividend yields. They offer significantly more income than the current interest rate on cash in the bank.
Below are two of my favourite ideas for large dividend yields.
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Future Generation Australia Ltd (ASX: FGX)
Future Generation Australia is a listed investment company (LIC) offering shareholders a large and growing dividend.
Instead of being managed by one fund manager, this LIC's money is managed by 16 different fund managers who all work for free so that Future Generation Australia can donate 1% of its net assets each year to youth charities – a great initiative.
This portfolio is significantly less exposed to the largest 10 businesses on the ASX, making it much more diversified, in my opinion. It gives exposure to more than 430 underlying securities.
Future Generation's portfolio has outperformed the S&P/ASX All Ordinaries Accumulation Index (ASX: XAOA), returning an average of 0.9% per annum more than the index between inception in September 2014 and May 2026. I think it helps to look at smaller, faster-growing businesses.
The solid investment returns have allowed this ASX share to steadily increase its payout each year since 2015 – that's a decade of dividend growth! The business recently announced a 5.5% increase of its interim dividend and gave guidance of an annual dividend per share of 7.6 cents per share for FY26.
In other words, it's guiding it will pay a grossed-up dividend yield of around 8% for 2026, including franking credits.
WAM Microcap Ltd (ASX: WMI)
WAM Microcap is the other ASX share I want to highlight. It's also a LIC, targeting the most exciting undervalued growth opportunities in the Australian microcap market.
As an example of the businesses in the portfolio, some of its current holdings include Artryra Ltd (ASX: AYA), Beacon Lighting Group Ltd (ASX: BLX), EchoIQ Ltd (ASX: EIQ), FINEOS Corporation Holdings PLC (ASX: FCL) and Kogan.com Ltd (ASX: KGN).
Its investment performance has been solid, with its portfolio delivering an average return per year of 14.4% since inception in June 2017, before fees, expenses and taxes.
Due to that high level of passive income, the business has regularly increased its annual dividend since FY18, with no dividend reductions during that period (along with a few special dividend payments).
WAM Microcap has provided guidance that it will pay an annual dividend per share of 10.7 cents in FY26. That translates into a grossed-up dividend yield of 10.5%, including franking credits, at the time of writing. It's hard to find a business with a consistent dividend that has a larger yield than that.
These aren't the only businesses offering appealing dividend income on the ASX.
