As of April 24, 2026, the ten-year US Treasury yields 4.31% and SCHD — the Schwab US Dividend Equity ETF — carries a 30-day SEC yield of 3.36%. That 95 basis-point gap is the widest Treasuries have led SCHD since the rate-hike cycle of 2022. For income investors sitting on $100,000 in cash, the question is direct: is SCHD still worth it when the US government offers a guaranteed coupon with no equity risk, no drawdown risk, and a state tax exemption? The honest answer depends entirely on whether you are measuring a one-year window or a ten-year window — and those two answers are not the same.

Key Takeaways

  • The 10-year Treasury currently yields 95 basis points more than SCHD's 30-day SEC yield (4.31% vs. 3.36%).
  • On a $100K position, the Treasury beats SCHD on income in years 1–3; SCHD's growing dividend overtakes the locked coupon by year 4.
  • Over 10 years, SCHD's projected cumulative dividends (~$51,200) exceed Treasury coupons ($43,100) by roughly $8,000 — before any capital appreciation.
  • Treasury coupons are taxed as ordinary income; SCHD's qualified dividends are taxed at the lower long-term capital gains rate.
  • Treasury coupons are exempt from state and local tax in all 50 states; SCHD dividends are not — a meaningful edge in high-tax states.
  • Three variables decide the right choice: the yield gap, the breakeven inflation rate, and your honest time horizon.

The Yield Snapshot: April 2026

The full Treasury curve as of April 24, 2026 puts the SCHD yield deficit in context. The two-year Treasury yields 3.78%. The five-year yields 3.92%. The ten-year yields 4.31%. The thirty-year yields 4.91%. SGOV, the ETF tracking three-month T-bills, was yielding approximately 3.94% on a trailing basis. SCHD's 30-day SEC yield stood at 3.36%. Across the entire curve, government bonds currently pay more than SCHD — a dynamic that last emerged in 2022 and triggered widespread debate about dividend ETF viability for income-focused portfolios.

The $100K Income Math: Year by Year

Buy a ten-year Treasury at 4.31% today and you receive exactly $4,310 per year for ten years with no variability. At maturity, the full $100,000 is returned. Gross outcome before tax: $143,100. That is the guaranteed floor — no volatility, no uncertainty, backed by the US government.

Run the same $100,000 into SCHD. Year one, the 3.36% SEC yield generates approximately $3,360 in dividends — roughly $950 less than the Treasury. The Treasury leads in year one, and by a meaningful margin. But SCHD pays a growing dividend, not a fixed coupon. The five-year dividend CAGR has been 9.15%, and the since-inception dividend growth rate sits near 11%.

Projecting forward at the five-year CAGR of 9.15%:

  • Year 1: ~$3,360 (Treasury: $4,310 — Treasury leads by $950)
  • Year 2: ~$3,670
  • Year 3: ~$4,007
  • Year 4: ~$4,376 — SCHD's dividend crosses the Treasury's locked coupon
  • Year 10: ~$8,064 — nearly twice the annual Treasury payment

Cumulative SCHD dividends over ten years at that growth rate total approximately $51,200. Treasury coupons over the same period total $43,100. SCHD wins on cumulative income by roughly $8,000 before reinvestment effects. On the capital side, the Treasury returns $100,000 flat at maturity. SCHD's total return has averaged approximately 13% annually since its 2011 inception — enough to grow $100,000 to roughly $340,000 by year ten at the historical pace. The trade-off is real: SCHD's all-time maximum drawdown is 32.5%, equivalent to a $32,500 paper loss on a $100,000 position at the worst point. Treasuries do not carry that risk.

By year ten, SCHD's projected annual dividend reaches approximately $8,064 — against the Treasury's locked coupon of $4,310. That is nearly a 2-to-1 income advantage for the dividend grower.

After-Tax Reality: Ordinary Income vs. Qualified Dividends

Gross yield comparisons can mislead. In a 24% federal tax bracket, Treasury coupons are taxed as ordinary income. Federal tax on $4,310 is $1,034, leaving $3,276 after federal tax. SCHD's dividends are qualified, taxed at the 15% long-term capital gains rate in that same bracket. Tax on $3,360 is $504, leaving $2,856 after federal tax. In year one, the Treasury still wins on after-tax cash income — by approximately $420. The SCHD crossover on an after-tax basis occurs around year three or four once dividend growth has compounded through the gap.

State tax adds a further dimension. Treasury interest is exempt from state and local income tax in all fifty states. SCHD dividends are taxable in most states. In California, New York, or New Jersey — where state income tax can reach 6% to 9% — the Treasury's after-tax advantage in the early years is considerably larger, and the SCHD crossover is pushed closer to year four or five. Investors in high-tax states should model their specific combined rate before assuming SCHD wins on income at any given point in the holding period.

For a broader look at how tax treatment interacts with dividend ETF allocation across different fund structures, the 4-ETF dividend ladder breakdown covering VIG, DGRO, SCHD, and DIVO provides useful context on generating income at different after-tax costs.

The Crossover Income Test: Three Signals

Three measurable signals identify which instrument fits a specific investor's situation. Each takes under five minutes to evaluate.

Signal 1 — The Yield Gap. The current spread between the ten-year Treasury and SCHD's 30-day SEC yield is 95 basis points. When this gap is below 50 basis points, SCHD almost always wins on a ten-year horizon because dividend growth easily compounds past the small Treasury head start. When the gap exceeds 100 basis points, the math tightens because the Treasury's higher starting base is harder to overcome in the early years. At 95 basis points, today's gap places significant weight on the dividend growth assumption — making the historical CAGR a more critical input than usual.

Signal 2 — Breakeven Inflation. As of April 24, 2026, the ten-year TIPS real yield was 1.89%. The nominal ten-year was 4.31%. The implied breakeven inflation rate — the bond market's consensus expectation for average inflation over the next decade — is 2.42%. SCHD's 9.15% five-year dividend CAGR represents 6.73 percentage points of real growth above that inflation expectation. The real purchasing power of a fixed $4,310 coupon in year ten is closer to $3,400 in today's dollars. A growing dividend carries an inflation hedge the fixed-coupon instrument cannot replicate over a decade-long holding period.

Signal 3 — Time Horizon and Drawdown Tolerance. If the $100,000 is needed within three years — for a down payment, tuition, or near-term living expenses — the Treasury wins on certainty. SCHD could lose 15% to 30% of its principal value in any three-year window. If the money is not needed for ten or more years and liquid reserves cover short-term needs, SCHD's income growth and capital appreciation have historically dominated. Answering this question honestly determines which instrument is actually appropriate for the situation.

What History Says About Treasury Yield Crossovers

The current environment has a direct precedent. In late 2022 and into early 2023, the ten-year Treasury similarly exceeded SCHD's yield. Analysis at the time concluded SCHD was no longer competitive for income-focused investors. The four years that followed:

  • 2023 SCHD total return: +11.63%
  • 2024 SCHD total return: +14.28%
  • 2025 SCHD total return: +14.97%
  • Year-to-date through mid-April 2026: +12.35%

Investors who locked into Treasuries at the 2022–2023 crossover captured the coupon but missed the equity recovery. The long-duration Treasury ETF TLT provides an additional data point: it returned negative 12.7% on a ten-year basis through early 2026. Owning long Treasuries during a rising-rate cycle carries real capital risk — a different category of risk than equity drawdown, but risk nonetheless. The investors who locked in near-1% Treasury yields in early 2020 are now holding coupons whose real purchasing power has been substantially eroded by inflation.

A community-sourced comparison offered additional short-horizon context: a Reddit user tracked $10,000 placed in SCHD versus $10,000 in SGOV over approximately 3.25 years ending March 2025. SCHD finished at $11,503 in total return including dividends. SGOV finished at $11,357. SCHD won — but by less than two percentage points over the full window. That result confirms that in a high cash-yield environment, short-duration Treasuries can close most of the gap on shorter horizons. As the Federal Reserve cut rates to 3.75% in January 2026, SGOV's yield tracks the front end of the curve lower while SCHD's dividend continues growing through the rate cycle regardless of where policy rates settle.

Investors comparing SCHD's trajectory to other dividend growth options in the current environment should also review the DGRO vs. SCHD dividend growth analysis, which examines whether SCHD's growth rate has moderated and what that means for long-term income projections relative to peers.

The Bottom Line

The ten-year Treasury at 4.31% pays more income than SCHD today. After taxes in years one through three — particularly in high-tax states — that advantage is real and should not be dismissed. If the money is needed within three years, or if a 30% equity drawdown would alter behavior or force a sale, the Treasury is the appropriate instrument. Certainty has value, and Treasuries provide it in a way no equity ETF can match.

But if the time horizon extends to ten or more years, the math inverts. SCHD's dividend overtakes the Treasury's locked coupon by year four. By year ten, SCHD pays nearly twice the annual income. Cumulative income exceeds the Treasury by roughly $8,000, and the equity position retains whatever capital appreciation follows. A fixed coupon that loses real purchasing power each year is not equivalent to a dividend that has historically grown at 9.15% annually — well above the bond market's 2.42% inflation expectation. Run the three signals: the yield gap, the breakeven inflation rate, and your honest time horizon. Those inputs identify the right trade for your specific situation.

Watch the Full Video Walkthrough

The complete year-by-year income projection, the Crossover Income Test walkthrough, and the full SCHD historical return data following the 2022 Treasury yield crossover are covered in detail in Treasuries Just Hit 4%. Is SCHD Still Worth It on $100K? on the HF YouTube channel. If you prefer a visual format for this type of side-by-side analysis, the video walks through every calculation with context for applying it across different tax brackets and time horizons. Watch it here: