As I mentioned here yesterday, at present the Australia and New Zealand Banking GrpLtd (ASX: ANZ) Online Saver account currently provides savers with a base interest rate of just 0.05%.
This is broadly in line with what you'll find with other savings accounts. And unfortunately, I expect rates to stay at these ultra low levels for some time to come.
In light of this, if you're looking to earn an income, then you might want to consider investing your funds into some of the high quality dividend shares on the ASX.
Three top ASX dividend shares I would buy are listed below:
Coles Group Ltd (ASX: COL)
I think this supermarket operator would be a great option for income investors. I think Coles is well-positioned to grow its dividend at consistently solid rate over the next decade. This is because of its positive growth outlook thanks to food inflation, its refreshed strategy, and expansion opportunities. Based on the current Coles share price, I estimate that it offers a fully franked 3.9% FY 2021 dividend.
Rio Tinto Limited (ASX: RIO)
Another dividend share that I think income investors ought to consider buying is this mining giant. Because of the high prices that iron ore is commanding at present, I believe Rio Tinto is well-placed to deliver high levels of free cash flow this year and next. And given the strength of its balance sheet, I suspect the majority of this free cash flow will be returned shareholders. In light of this, I estimate that Rio Tinto shares currently offer a forward fully franked dividend yield of at least 5%.
Rural Funds Group (ASX: RFF)
A final dividend share that I would buy right now for income is Rural Funds. It is a leading agriculture-focused property company with a collection of quality assets throughout Australia. The main attraction to Rural Funds for me is its long term tenancies. These have been designed to allow the company to consistently increase its distribution at a solid rate each year. For example, in FY 2020 it plans to pay 10.85 cents per share and in FY 2021 it intends to pay shareholders 11.28 cents per share. Based on the current Rural Funds share price, the latter equates to a 5.7% yield.
