ASX shares can give investors significantly higher income rates than what someone can get from the bank.
It's a great advantage of ASX dividend shares that they can deliver larger (and growing) payouts compared to a term deposit.
Franking credits are a very useful bonus because they can help offset the tax or even unlock a tax refund, depending on the taxpayer's tax rate. Franking credits are a significant boost to the grossed-up dividend income. Below are two of the highest-yielding ASX shares I'd be (very) willing to buy today.
Image source: Getty Images
Premier Investments Ltd (ASX: PMV)
There are three key businesses to Premier Investments: children's school accessories business Smiggle, pyjamas retailer Peter Alexander and a sizeable stake in the coffee machine business Breville Group Ltd (ASX: BRG).
The company's latest annual result revealed a significant dividend yield for shareholders and a generous dividend payout ratio.
In FY26, the ASX share reported $211.1 million of profit before tax, with its retail segment achieving $175.9 million of operating profit (EBIT). With its profit, the company declared an annual dividend per share of 81 cents, despite the cost of investing in and then closing its Peter Alexander UK business.
An annual dividend of 81 cents per share translates into a grossed-up dividend yield of 8.3%, including franking credits, at the time of writing.
I think both Peter Alexander and Breville have good growth potential. In the first half of FY27, Premier Investments expects Peter Alexander to open at least five new stores, including a large flagship store in the Sydney CBD. The ASX share also sees opportunities for at least 15 more new and larger format stores in existing markets.
Additionally, Peter Alexander is looking for international wholesale opportunities and it also plans to return to Myer Holdings Ltd (ASX: MYR) as a concession partner.
According to the projection on Commsec, the Premier Investments share price is valued at just 14x FY27's estimated earnings.
Future Generation Australia Ltd (ASX: FGX)
This ASX dividend share has a number of very appealing features.
Firstly, it donates 1% of its net assets each year to youth-focused charities, which I think is a great cause.
There are no management fees or performance fees involved with this listed investment company (LIC). One of the biggest criticisms thrown at fund managers is that they cost a lot, but that's not the case with Future Generation Australia.
It invests in more than a dozen funds of fund managers who all work for free, giving Future Generation shareholders significant diversification.
Now, let's look at the dividend income from the ASX share.
The business plans to increase its annual dividend per share to 7.6 cents in FY26. That would be more than a decade of consecutive annual dividend increases.
Based on that dividend projection, that's a grossed-up dividend yield of 8.1%, including franking credits.
