If you've been relying on term deposits for income, 2025 might be the year to rethink that strategy.
The Reserve Bank of Australia has already cut interest rates once this year — and according to economists, three more cuts are on the cards before the end of the year. That's welcome news for borrowers, but for savers? Not so much.
Term deposit rates, which had been slowly creeping higher, are now expected to head in the opposite direction. And that means income-seeking investors may need to look elsewhere for reliable returns.
Enter dividend ASX shares.
With the right mix of quality businesses, investors can generate consistent income — often at dividend yields well above what the banks are offering. Here are three ASX dividend shares analysts think investors should consider as alternatives to term deposits.
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GQG Partners Inc. (ASX: GQG)
For those chasing yield, GQG Partners stands out. This global fund manager has been delivering robust earnings, growing funds under management, and paying out generous dividends along the way.
Goldman Sachs is bullish and has a buy rating and $3.00 price target on its shares.
As for income, the broker is forecasting fully franked dividends of 14 US cents per share in FY 2025 and 16 US cents per share in FY 2026. Based on its current share price of $1.93, this equates to dividend yields of 11.8% and 13.5%, respectively.
Telstra Group Ltd (ASX: TLS)
Telstra has quietly re-established itself as one of the most dependable dividend shares on the ASX.
With strong cash flow from its mobile and infrastructure businesses, a streamlined cost base, and improving profitability, the telco is well placed to continue growing dividends modestly over time. As a result, for investors looking for a low-volatility income anchor in their portfolio, Telstra fits the bill.
Goldman Sachs is a fan of Telstra and has a buy rating and $4.50 price target on its shares.
In respect to income, the broker is forecasting fully franked dividends per share of 19 cents in FY 2025 and then 20 cents in FY 2026. This equates to dividend yields of 4.4% and 4.6%, respectively.
APA Group (ASX: APA)
Finally, APA could be a third ASX dividend share to buy. It is one of Australia's largest owners and operators of gas pipelines and energy infrastructure. It is a steady, defensive business, backed by long-term contracts and regulated revenue.
APA has a strong track record of delivering reliable distributions, and this is expected to continue.
Macquarie, which has an outperform rating and $8.14 price target on its shares, is forecasting increases to 57 cents per share in FY 2025 and then 58 cents per share in FY 2026. This will mean yields of 7.3% and 7.1%, respectively.
