Low interest rates make it tough for savers to make a decent return on their cash. With the cash rate currently sitting at just 2%, some might even be losing net wealth each year once taxes (on the interest earned) and inflation come into play.
The problem is, some experts are predicting interest rates will fall even further in 2016, possibly to a low of just 1.5%. By contrast, a number of ASX-listed companies are offering returns two or even three times that amount in dividends alone.
While that might include big-name companies like BHP Billiton Limited (ASX: BHP) and Commonwealth Bank of Australia (ASX: CBA), I personally don't think they're the best dividend-paying shares to buy for 2016.
Waning global demand for resources is crushing commodity prices, impacting the miners, while the big four banks are facing tougher regulations which could hinder their returns as well.
Three ASX shares with sustainable dividends for 2016
Although most investors typically focus their attention on those traditional blue chip shares, there are a number of others which don't receive anywhere near as much attention, yet could still be great investments over the coming years.
Transurban Group (ASX: TCL) is one such company. The company owns and operates a number of toll roads in Australia and the United States, providing critical infrastructure which should become even more important as the population grows. At its current price, the shares are trading on a partially franked yield of 3.8% which should continue to expand over the coming years.
Travel agency Flight Centre Travel Group Ltd (ASX: FLT) could also be a great company for dividend investors to consider. With a huge cash balance and plenty of room left to expand, the company's shares are trading on a forecast 4% dividend yield, fully franked.
Retail giant Wesfarmers Ltd (ASX: WES) could also be a solid pick up for investors focused on the ultra-long term. The company, which owns businesses such as Coles, Bunnings, Officeworks and Kmart, has a long history for growing earnings and dividends and, after falling away in 2015, could be a good opportunity for investors to buy. The shares are trading on a forecast 4.8% fully franked dividend yield, which grosses to 6.9%.
