Unhappy with your Cash ISA interest rate? I like these two high dividend yield stocks

The clocks have gone back. It’s darker earlier. The days are getting colder. If that wasn’t enough, you may be looking at your Cash ISA rate with added disappointment. 

Typical rates on the high street at the moment vary from around 1% to 2% interest per annum, depending on how long you lock it in for and other terms and conditions. This means if you put £1,000 into an ISA, it would generate you £10 to £20 per year. Hardly enough to get you out of bed on a cold morning!

So what stocks could help you to make your money work harder via dividends?

Aviva

It’s rumoured that the name of Aviva (LSE: AV) stemmed from ‘viva’, which is Latin for ‘alive’. Unfortunately, over the past few years, the growth and opportunities at the firm have been anything but alive.

The business operates mostly in the insurance market but also has a decent presence in investments and savings, along with pension provisions. This large span of operations (multiplied over 16 countries) has seen it struggle recently. 

Take its debt position, for example. Businesses that are stretched usually take on excessive debt, which is the case with Aviva over the past decade. However, current CEO Maurice Tulloch has made a commitment to reduce debt by £1.5bn over the next three years, saving a colossal £90m per year just in interest payments.

I like this change in direction and focus on cost-cutting. You can pick up the stock now at around 430p, with a dividend yield of around 7.5%, giving you much higher returns than any Cash ISA out there and with the potential for share price growth too if Tulloch manages to drive growth at the business.

Rio Tinto

One of the five largest mining companies in the world, Rio Tinto (LSE: RIO) has been an investor stalwart for many decades. And it has been a favourite for dividend yield hunters in recent years, as the yield has been above the UK interest rate for more than the past decade. 

Currently, the yield sits at around 6.8%, which is even more impressive if you consider the fact that the share price has been rising too. If you had bought the stock four years ago and held it in a Stocks and Shares ISA, not only would you have enjoyed dividend payouts, but also a 40% capital appreciation.

Aside from fundamentals, I’m always a fan of holding UK listed firms that are genuinely global in nature. London may be the joint headquarters of Rio Tinto (along with Melbourne), but the vast majority of its business is done outside of the UK. From the extraction of its commodities, or its refineries, Rio Tinto isn’t hugely affected by developments locally.

For example, despite Brexit uncertainty and a weaker British pound, the share price, as mentioned above, has performed very well. In fact, the business even benefits from a weaker pound due to its overseas earnings. 

Overall, adding in high-yield dividend stocks like Aviva and Rio Tinto can enable you to potentially achieve a higher payout than a Cash ISA.