Wealthy PotSCHD vs SGOV: Dividend Stocks and T-Bills Are Not the Same Kind of Income
SCHD and SGOV are not substitutes. SCHD owns about 100 US dividend-paying stocks; SGOV owns US Treasury bills that mature within three months. They share no holdings. On 1 October 2026 SGOV's 30-day SEC yield was 3.70% and SCHD's 3.37%, so the cash fund was paying more. That is not the right comparison, though. SGOV's price barely moves; SCHD's three-year standard deviation was 13.46%, and its worst quarter was -21.55%. SCHD is a long-term stock holding with income and growth. SGOV is a place to keep cash you may need.
Table of Contents
The Short Answer
- Different assets. SCHD tracks the Dow Jones U.S. Dividend 100 Index of stocks. SGOV tracks Treasury bills with three months or less to maturity.
- Overlap: 0%. One holds stocks, the other government debt.
- Yield today: SGOV 3.70%, SCHD 3.37%. 30-day SEC yields, 1 October 2026. SGOV's follows short-term interest rates; SCHD's follows dividends and the share price.
- 2022: SCHD -3.23%, SGOV +1.58%. And SCHD's worst quarter in its prospectus was -21.55% (Q1 2020). SGOV's worst was 0.00%.
- Long-run growth: SCHD. Ten years to 30 June 2026, SCHD returned 12.37% a year at NAV. SGOV only launched in 2020; over five years it returned 3.59% a year against SCHD's 8.51%.
- Fees: SCHD 0.06%, SGOV 0.09%.
- Taxes differ. All of SCHD's distributions in its fiscal year to August 2025 were qualified dividends. SGOV's income is Treasury interest: taxed as ordinary income federally, and possibly exempt from state tax.
Overlap: 0%, Stocks vs Treasury Bills
Our Portfolio Overlap Checker finds no shared holdings. Both funds' Form N-PORT filings are for 31 May 2026: SCHD reported 99 stock holdings and SGOV 22 Treasury bills. SCHD was 99.8% stocks, SGOV 100% debt.
That is the whole point of this comparison. The question behind it is usually where to put money that is waiting, or whether to move from dividend stocks into T-bills while T-bills pay more. Those are allocation decisions between stocks and cash, not a choice between two similar funds.
SCHD vs SGOV, Side by Side
| SCHD | SGOV | |
|---|---|---|
| Full name | Schwab U.S. Dividend Equity ETF | iShares 0-3 Month Treasury Bond ETF |
| Index | Dow Jones U.S. Dividend 100 Index | ICE 0-3 Month US Treasury Securities Index |
| What it holds | About 100 US stocks with at least 10 straight years of dividends, ranked on cash flow to debt, return on equity, yield and dividend growth | US Treasury bills maturing within three months |
| Expense ratio | 0.06% | 0.09% |
| Cost example, $10,000 over 10 years | $77 | $115 |
| Holdings | 102 (Schwab, 2 Oct 2026) | 22 (N-PORT, 31 May 2026) |
| 30-day SEC yield (1 Oct 2026) | 3.37% | 3.70% |
| Trailing yield | 3.00% distribution yield, TTM to 31 Aug 2026 | 4.00% 12-month trailing, to 1 Oct 2026 |
| 3-year standard deviation (31 Aug 2026) | 13.46% | 0.22% |
| Worst quarter in prospectus chart | -21.55% (Q1 2020) | 0.00% (Q4 2021) |
| 2022 calendar return | -3.23% | +1.58% |
| Net assets | $108.7 billion (2 Oct 2026) | $113.1 billion (2 Oct 2026) |
| Inception | 20 October 2011 | 26 May 2020 |
Why the Yields Are Not Comparable
A 3.70% yield on SGOV is close to the whole expected return. Treasury bills mature at face value within weeks, so the price hardly changes; SGOV's effective duration was 0.11 years on 1 October 2026. When short-term rates fall, SGOV's yield follows them down as its bills roll over.
A 3.37% yield on SCHD is only the income part. The rest of its return comes from share prices, which can rise or fall far more than the dividend. Over the ten years to 30 June 2026, SCHD's total return was 12.37% a year, well above any dividend yield. In 2022 it lost 3.23% including dividends. Companies can also raise or cut dividends; SCHD's index screens for 10 consecutive years of payments, which says something about the past, not a guarantee.
So "SGOV pays more than SCHD right now" is true on 1 October 2026, and it is not a reason to swap one for the other. On $10,000, the yields come to roughly $370 a year from SGOV and $337 from SCHD. That is current yield, not a forecast for either fund.
Returns: 2022 and the Rest
| Calendar year, total return at NAV | SCHD | SGOV |
|---|---|---|
| 2021 | 29.78% | 0.02% |
| 2022 | -3.23% | 1.58% |
| 2023 | 4.58% | 5.13% |
| 2024 | 11.60% | 5.28% |
| Average annual total return at NAV to 30 Jun 2026 | 1 year | 3 years | 5 years | 10 years |
|---|---|---|---|---|
| SCHD | 24.08% | 13.52% | 8.51% | 12.37% |
| SGOV | 3.90% | 4.68% | 3.59% | n/a (launched May 2020) |
In 2022 the cash fund beat the dividend fund by 4.81 points. Over 2021 to 2024, $10,000 compounded to about $14,660 in SCHD and $11,250 in SGOV, by our hypothetical arithmetic with distributions reinvested and no taxes. The long-run edge for stocks comes with drawdowns like SCHD's -21.55% quarter in early 2020. SGOV's prospectus chart has no losing quarter.
Past performance does not guarantee future results. This is educational information, not personalised investment advice.
Taxes: Qualified Dividends vs Treasury Interest
SCHD. In its fiscal year ended 31 August 2025, SCHD paid $2,469,946,295 in distributions, and its annual report lists qualified dividend income of exactly $2,469,946,295. By our reading, all of it was qualified. IRS Publication 550 explains that qualified dividends are "subject to the same 0%, 15%, or 20% maximum tax rate that applies to net capital gain," as long as you meet the holding-period rule. State treatment of dividends varies.
SGOV. Its income is interest on Treasury bills, paid to you as fund dividends. Federally that is ordinary income at your regular rate, not the lower qualified rate. At the state level, 31 U.S.C. § 3124 says "Stocks and obligations of the United States Government are exempt from taxation by a State," and Publication 550 says Treasury interest "is exempt from all state and local income taxes." For a fund, SGOV's prospectus words it carefully: "Certain states and localities may exempt from tax distributions attributable to interest from U.S. federal government obligations."
The practical result in a taxable account: SCHD's income gets the lower federal rate, SGOV's may escape state tax. Which is better depends on your bracket and your state. In an IRA or 401(k), neither matters year to year.
Which One, or Both?
- Emergency fund, or money for a purchase within two years: SGOV, a money market fund, or a high-yield savings account. A -21.55% quarter is exactly what that money cannot take. Compare cash options in SGOV vs SPAXX and BIL vs SGOV.
- Long-term investing for income and growth: SCHD, as part of a stock allocation. See how it compares with the broad market in SCHD vs VOO and with other dividend funds in VYM vs SCHD and DGRO vs SCHD.
- "T-bills pay more, should I sell SCHD?" That is market timing between stocks and cash. If rates fall, SGOV's yield drops within weeks; if stocks rise in the meantime, you miss it. Selling in a taxable account may also trigger capital gains tax.
- Retiree drawing income: holding both can work, with near-term spending in something like SGOV so you are not forced to sell stocks after a bad quarter. The split is a personal decision; neither prospectus suggests one.
- Taxable account in a high-tax state, cash sleeve: SGOV's Treasury income is the stronger case, subject to your state's rules.
Sources & Methodology
Fees, index rules, calendar returns and worst quarters come from the funds' prospectuses on SEC EDGAR. Yields, standard deviation, holdings and returns to 30 June 2026 come from the issuers' own fund pages, read on 5 October 2026. SCHD's tax figures come from its audited annual report. No figure came from a data aggregator.
- Schwab Strategic Trust prospectus (Form 485BPOS), filed 22 December 2025: SCHD's fee, index rules, bar chart (2015-2024) and best and worst quarters.
- iShares 0-3 Month Treasury Bond ETF (SGOV), Summary Prospectus dated 29 June 2026 (Form 497K)
- Schwab SCHD fund page and iShares SGOV fund page
- Schwab Strategic Trust Form N-CSR, fiscal year ended 31 August 2025: SCHD distributions and qualified dividend income.
- IRS Publication 550 and 31 U.S.C. § 3124
- SEC Form N-PORT for both funds, period ended 31 May 2026, read by our Portfolio Overlap Checker.
This article is for general education only and is not investment, tax or legal advice. SCHD is a stock fund and can lose a large part of its value; its worst quarter in the prospectus was -21.55%. SGOV can also lose value, trades at a market price, and pays less when short-term rates fall. The dollar and compounding figures are hypothetical illustrations. All figures were checked on 5 October 2026 and yields change daily. Confirm current figures with Schwab and iShares before acting.
FAQ: SCHD vs SGOV
Is SGOV better than SCHD right now?
For cash you need soon, yes: its yield was 3.70% on 1 October 2026 with almost no price risk. For long-term growth, no: SCHD returned 12.37% a year over the ten years to 30 June 2026, with large swings along the way.
Do SCHD and SGOV overlap?
No. Our checker shows 0%. SCHD holds stocks and SGOV holds Treasury bills.
How did SCHD do in 2022 compared with SGOV?
SCHD returned -3.23% and SGOV +1.58%, per their prospectus charts.
Which has the higher yield?
SGOV, on 1 October 2026: a 3.70% 30-day SEC yield against SCHD's 3.37%. SGOV's yield moves with short-term rates; SCHD's with dividends and its share price.
Are SGOV dividends qualified?
No. SGOV's income is Treasury interest, taxed federally as ordinary income. It may be exempt from state income tax, depending on your state. SCHD's distributions for its fiscal year to August 2025 were all qualified dividends.
Should I sell SCHD and buy SGOV while T-bills pay more?
That swaps a stock holding for cash, which changes your risk and return, not just your income. We cannot tell you whether to do it. Consider your time horizon, taxes on any gains, and what happens to SGOV's yield if rates fall.
Can I hold both?
Yes. They do different jobs, and holding both duplicates nothing.
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"SCHD vs SGOV: Dividend Stocks and T-Bills Are Not the Same Kind of Income." Wealthy Pot, 2026. https://wealthypot.com/schd-vs-sgov/
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