Later today the Reserve Bank will hold its monetary policy meeting for June. According to the latest cash rate futures, the market is currently pricing in a 45% probability of a rate cut to zero.
While I'm not convinced rates will go lower again, I do expect them to stay at these lowly levels for at least a couple of years.
In light of this, I continue to believe that investors should look for a source of income from the share market instead of term deposits or savings accounts.
But which shares should you buy? Three top ASX dividend shares I would buy for income are listed below:
Coles Group Ltd (ASX: COL)
I think this supermarket operator would be a good option for income investors. This is because I believe Coles is well-placed to deliver solid earnings growth over the next decade thanks to its refreshed strategy and defensive business. And with Coles intending to pay out upwards of 90% of its earnings to shareholders, this bodes well for its dividends in the future. At present I estimate that its shares offer a fully franked 3.9% FY 2021 dividend.
VanEck Vectors Australian Banks ETF (ASX: MVB)
I think the big four banks are all trading at attractive levels for investors. But if you're not sure which bank to buy ahead of the others, then you could just buy a piece of them all. You can do this by buying the VanEck Vectors Australian Banks ETF. You'll also get a slice of the regional banks and investment bank Macquarie Group Ltd (ASX: MQG) as well. I estimate that its units will provide investors with a partially franked yield of at least 5% in FY 2021.
Wesfarmers Ltd (ASX: WES)
A final dividend share I would buy is Wesfarmers. I think the conglomerate is capable of growing its earnings and dividends at a solid rate over the next decade. This is thanks to the quality and growth potential of its portfolio of assets and potential earnings accretive acquisitions in the near future. Based on its last close price, I estimate that its shares offer a fully franked 3.6% FY 2021 dividend yield.
