With interest rates predicted to fall substantially this year, it's a great time to think about securing passive income from ASX dividend shares. In contrast to 'safer' investments like cash term deposits and government bonds, ASX dividend shares can offer an additional benefit for passive income seekers – franking credits.

And although dividend-paying stocks carry a higher risk than government-guaranteed term deposits, they compensate for this by offering potentially higher returns.

So today, let's discuss three ASX dividend stocks that are my best picks for passive income right now.

3 ASX dividend stocks that I would buy for franked passive income today

MFF Capital Ltd (ASX: MFF)

First up, we have a listed investment company (LIC) in MFF Capital. MFF Capital is a relatively unknown LIC. However, I think it is one of the highest quality investments on the ASX.

MFF is managed by Magellan veteran Chris Mackay. It focuses on running a concentrated portfolio of the best US stocks on the market. It does so using a Buffett-inspired methodology of buying high-calibre companies at prices that make sense, and then holding them over long periods of time. Some of MFF's long-term top holdings include Amazon, Alphabet, Visa, and Mastercard.

In addition to rising 52.3% over the past five years, MFF has also been building out its passive income chops. It has increased its annual dividend from 6.5 cents per share in 2021 to 13 cents per share in 2024. The company has indicated it will fund 16 cents per share in dividends in 2025. These dividends have always come with full franking credits attached too.

At current pricing, this ASX passive income stock is trading on a dividend yield of 3.5%.

Washington H. Soul Pattinson and Co Ltd (ASX: SOL)

Next up, we have Washington H. Soul Pattinson, or Soul Patts for short. Soul Patts is another company that manages a portfolio of underlying investments on behalf of its shareholders. Rather than the US stocks that MFF buys, Soul Patts has a diversified portfolio that consists mostly of ASX shares. But it also includes other investments like private credits and unlisted businesses.

Soul Patts is dividend royalty on the ASX. It is the only passive income stock on the ASX that has increased its fully franked annual dividend every year since 2000 (including in 2025 so far). And at a compounded average rate of 9.8% per annum to boot.

Today, Soul Patts shares trade on a dividend yield of 2.67%.

Vanguard Australian Shares High Yield ETF (ASX: VHY)

Finally, let's talk about a passive income-focused exchange-traded fund (ETF). The Vanguard Australian Shares High Yield ETF is a fund that holds a portfolio of dividend shares, all selected on their past and future potential income. You'll find income stalwarts like Commonwealth Bank of Australia (ASX: CBA) and the other big four banks here, as well as Telstra Group Ltd (ASX: TLS), Coles Group Ltd (ASX: COL), and BHP Group Ltd (ASX: BHP).

In my assessment, many of the ASX's best passive income stocks, including CBA, Telstra, Coles, and Wesfarmers, are trading at historically expensive prices. As such, I think an ETF like this, which spreads your money across dozens of different shares, is a compelling alternative at present to buying some of these individual passive income stocks.

VHY pays out dividend distributions every quarter. As it currently stands, this ASX ETF is trading on a trailing yield of 7.69%.