Bond funds play an important role in a diversified portfolio by providing steady income and reducing overall volatility.
While it’s impossible to match the growth potential of small-cap stocks or dynamic in fixed-income markets, by contrast there are almost never deep declines in bond markets — making bond funds crucial in offsetting risk.
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The bond market is just as varied as the stock market, however, and investors can choose from a wide range of funds. Flavors include government debt, corporate bonds, inflation-protected securities and broad investment-grade markets, allowing each investor to find the right choice based on their specific goals and .
For investors seeking dependable income and greater portfolio , Schwab’s lineup of low-cost bond ETFs offers a variety of options that can serve as core holdings or targeted allocations within a broader investment strategy. Here are five of the best Schwab bond funds to buy now:
| Fund | Expense ratio | 30-day SEC yield |
| Schwab U.S. Aggregate Bond ETF (ticker: ) | 0.03% | 4.6% |
| Schwab Intermediate-Term U.S. Treasury ETF () | 0.03% | 4.4% |
| Schwab 5-10 Year Corporate Bond ETF () | 0.03% | 5.3% |
| Schwab U.S. TIPS ETF () | 0.03% | 10.6% |
| Schwab Short-Term U.S. Treasury ETF () | 0.03% | 4.2% |
Schwab U.S. Aggregate Bond ETF ()
SCHZ is the firm’s flagship core fixed-income offering and one of the lowest-cost ways to gain diversified exposure to the U.S. investment-grade bond market via an ETF. This holds more than 12,000 individual investments, including Treasury securities, government agency bonds, mortgage-backed securities, asset-backed securities and investment-grade corporate bonds to give a full picture of the bond market. The ETF also maintains a “goldilocks” intermediate duration that is neither too short nor too long, making it suitable as a core holding for just about any portfolio. If you want to keep things simple, SCHZ offers exposure to nearly every major segment of the U.S. taxable bond market in a single fund.
Schwab Intermediate-Term U.S. Treasury ETF ()
As the name implies, this Schwab bond fund is focused on intermediate U.S. Treasury bonds. The fund has an average duration of about five years, and it holds about 100 different bonds issued directly by the U.S. government. As Uncle Sam is among the most creditworthy borrowers on the planet, that makes the risk of default effectively zero, providing incredible peace of mind. However, investors should remember the relationship between risk and reward, meaning Treasury bonds generally carry smaller yields as a result. If you don’t mind leaving a bit of yield on the table, SCHR is appropriate for investors who want higher income than short-term Treasurys without assuming the significant duration risk associated with long-term government bonds or corporate debt.
Schwab 5-10 Year Corporate Bond ETF ()
SCHI invests exclusively in investment-grade corporate bonds issued by financially strong U.S. companies — meaning no “junk” bonds from risky operators — with maturities between five and 10 years. Although investors assume modest credit risk in exchange for higher yield, the roughly 2,400 bonds are from mega-corporations like Facebook parent Meta Platforms Inc. () and Big Pharma icon Pfizer Inc. (). The bigger yield and relative stability make SCHI an appealing complement to a core aggregate bond fund or .
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Schwab U.S. TIPS ETF ()
First things first: The yield listed on this fund is the SEC yield as measured by a strict mathematical formula over the past 30 days. And since Treasury Inflation-Protected Securities (TIPS) are a special class of U.S. government bonds benchmarked to a price index, steeply rising inflation has been a tailwind. However, this tactical ETF carries risk as inflation rates are not reliable — and a downswing in prices can really hurt TIPS investors. SCHP is valuable to retirees and concerned that rising inflation could erode the real value of fixed-income investments and future purchasing power, particularly in 2026. But long-term investors should think carefully about using SCHP in their portfolio despite the big near-term yield.
Schwab Short-Term U.S. Treasury ETF ()
SCHO rounds out the list by providing exposure to an asset that is almost as good as cash. Short-term Treasury securities mature in one to three years and are tied to the U.S. government — meaning unless America goes bankrupt in the next 18 months or so, you’ll get paid just fine. This corner of the bond market has historically exhibited significantly lower volatility than the stock market as well as intermediate- or long-term bonds. While its yield may fluctuate as short-term interest rates move, the ETF generally doesn’t budge otherwise, and it provides a highly liquid, government-backed source of income. You won’t grow your portfolio by leaps and bounds, and in many ways SCHO should be seen as an alternative to high-yield savings accounts or . But it is especially well-suited for investors who are focused on capital preservation over growth.
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Update 07/30/26: This story was published at an earlier date and has been updated with new information.
