With the variable interest rate on most savings accounts currently just 0.5%, I believe savers ought to consider putting their money to work in the share market.
After all, with inflation currently tracking at 1.9%, any money in one of these accounts is actually being eroded by inflation each year.
Whereas with an average dividend yield of 4%, you can potentially grow your savings in the share market.
Three dividend shares that I think would be great options are listed below. Here's why I like them:
National Storage REIT (ASX: NSR)
Based on its last close price, this self storage centre operator's units currently provide investors with a trailing 5.3% yield. Due to its large cash balance, development pipeline, and growth through acquisition strategy, I believe National Storage is well-positioned to grow this distribution at a solid rate over the coming years. This could make it a good option for income investors.
Wesfarmers Ltd (ASX: WES)
I think this conglomerate could be another good option for income investors. Although its Kmart business struggled a little over the Christmas period, it was facing a tough comparable period and also lost ~1% of its sales by exiting low margin DVD sales. In light of this, I think it could be worth considering an investment in the company today after the pullback in its share price. Especially with its shares offering an estimated fully franked 5.8% forward dividend.
Westpac Banking Corp (ASX: WBC)
Instead of having your money in one of Westpac's savings accounts, I would consider buying the banking giant's shares. After all, at present they offer a trailing fully franked 6.2% dividend yield, which is significantly higher than the interest rates available on its savings accounts. However, with the Royal Commission final report due at the end of next week, it may be best to wait until this has been released before making a move.
