This Schwab ETF Includes 100 Dividend Stocks, Costs $6 Annually, and Offers Higher Returns Than Most Savings Accounts

March 16, 2026

Schwab US Dividend Stock ETF Overview

The Schwab US Dividend Stock ETF (SCHD) has an annual charge of just 0.06%, equating to $6 per $10,000 invested. It offers a yield of 3.39%, returning 12.29% year-to-date and an impressive 225.89% over the last decade. Among its top holdings, Lockheed Martin (LMT) takes the lead at 4.9%, projecting 2025 sales of $75.05 billion and a backlog of $194 billion. Then there’s Verizon (VZ) at 4.49% with a 5.4% yield, ConocoPhillips (COP) at 4.48%, which has upped its quarterly dividend to $0.84, and Chevron (CVX) at 4.42%, marking its 39th consecutive year of dividend increases. Other noteworthy dividend increases include Bristol-Myers Squibb (BMY), which has a 94-year streak, Merck & Co. (MRK) at $0.85 per quarter, and Coca-Cola (KO), which has raised its quarterly dividend to $0.53, extending its 63-year run of increases.

SCHD’s annual dividend growth rate, around 12%, significantly compounds over time, promising total returns that surpass those of fixed-rate savings options while keeping a stake in Dividend Aristocrats across sectors like energy, consumer staples, and healthcare.

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When we look closely at SCHD, we note that it costs $6 annually for a $10,000 investment, holds a hundred dividend stocks, and maintains a yield of 3.39%. With the federal funds rate still at 3.75%, high-yield savings accounts typically offer similar returns, which makes the yield spread rather tight. However, SCHD brings something special to the table: price appreciation. The fund has gained 12.29% since the year started and 17.28% over the past year. Its ten-year return clocks in at an eye-opening 225.89%.

To give some perspective, the average mutual fund fee sits around 0.44%, which translates to $44 per year on a $10,000 investment. Advisor-managed portfolios often reach 1% or $100 annually. SCHD’s 0.06% expense ratio means that most, if not all, of the investor contributions are more heavily concentrated within the portfolio instead of being directed toward fees.

The top 10 holdings of SCHD represent nearly 40% of the fund and include some household names. Notably, Lockheed Martin leads the charge with 4.9% of total assets. This defense contractor is on track for fiscal 2025 sales of $75.05 billion, with a substantial backlog of $194 billion. Its quarterly dividend stands at $3.45 per share, increasing from $3.30 through 2025.

Healthcare, in particular, offers some stability here. Bristol-Myers Squibb has been a reliable dividend payer for 94 years, while Merck pays $0.85 each quarter. Coca-Cola, for its part, has increased its quarterly dividend to $0.53, marking its 63rd straight year of rises.

In terms of sector allocation, the fund leans heavily towards income, with energy accounting for 22.7%, consumer staples 18.6%, and healthcare 15.7%. Notably, utilities and real estate, sectors often affected by rising interest rates, have zero exposure in this fund.

Importantly, SCHD boasts a 10-year dividend growth rate of approximately 12% annually. This kind of compounding growth is significant; even passive investors can see their dollar of income grow impressively over a decade. When combined with the starting yield of 3.39%, the overall total return far surpasses what one might expect from a static, no-growth savings account. For instance, while the S&P 500 is down 2.88% this year, SCHD is enjoying a rise of over 12% for the same period.

Established in October 2011, SCHD now has net assets of $85.9 billion, and with a portfolio turnover of merely 30%, it reflects a genuine buy-and-hold strategy focused on dividend quality rather than a reactive approach.

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