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Data last updated: Oct 17, 2026
Dividend Yield: 3.54%
Dividend Frequency: monthly
Years of Dividend History: 12
The Vanguard Tax-Exempt Bond Index Fund ETF Shares dividend comes from a portfolio of municipal bonds whose interest is exempt from U.S. federal income taxes and the federal alternative minimum tax (AMT). VTEB tracks an index of bonds issued by states, local governments, and agencies, passing that tax-exempt income to shareholders monthly. The fund currently yields 3.6%, a figure that carries extra weight for investors in higher tax brackets given the federal tax exemption on the underlying interest. That combination of monthly income and tax-exempt status makes VTEB a natural fit for income-focused investors who want to keep more of what the fund pays.
Vanguard Tax-Exempt Bond Index Fund ETF Shares dividend safety depends on the aggregate interest payments generated by the municipal bonds in the underlying index, not on corporate earnings or a payout ratio. Payout ratio is not applicable (fund/ETF): the fund passes through what the index holdings produce, so the dividend level moves with interest rates and the composition of the municipal bond market. The history table shows two meaningful year-over-year declines, with 2020 dropping to $1.0980 from $1.2293 in 2019, a reminder that the monthly distributions are not fixed and can fall when bond market conditions shift.
Vanguard Tax-Exempt Bond Index Fund ETF Shares dividend history shows a CAGR of 7.9% per year from 2016 to 2025. Per-share payments grew from $0.8340 in 2016 to $1.6552 in 2025 (2026 is a partial year and excluded from the growth calculation). 2023 delivered the largest single-year jump in the window, a 37.8% increase, driven by the sharp rise in municipal bond yields that year. Growth is not linear: the window includes at least one decline exceeding 5%, so the 7.9% CAGR reflects a bumpy path, not a straight line upward.
| Period | CAGR | From | To |
|---|---|---|---|
| 3-Year | +17.0% | $1.03 (2022) | $1.66 (2025) |
| 5-Year | +8.6% | $1.10 (2020) | $1.66 (2025) |
| 10-Year | +15.3% | $0.40 (2015) | $1.66 (2025) |
VTEB fits income-focused investors who want monthly, federally tax-exempt distributions from a broad municipal bond portfolio. The current yield of 3.6% falls in the moderate (2–4%) range, which is meaningful on an after-tax basis for investors subject to higher federal rates, even if the headline number looks modest. Four consecutive years of dividend increases show recent momentum, but the history also contains declines, so the income stream is not guaranteed to hold its level. The trade-off is clear: VTEB offers tax-advantaged monthly income with a 7.9% annualized growth rate over nine years, but the distribution level is tied to interest rates and index composition, not a corporate decision to protect a streak.
| Payment Date | Amount per Share |
|---|---|
| 2026-10-01 | $0.1370 |
| 2026-09-01 | $0.1434 |
| 2026-08-03 | $0.1415 |
| 2026-07-01 | $0.1420 |
| 2026-06-01 | $0.1381 |
| 2026-05-01 | $0.1423 |
| 2026-04-01 | $0.1415 |
| 2026-03-02 | $0.1487 |
| 2026-02-02 | $0.1398 |
| 2025-12-18 | $0.1417 |
| Year | Total Dividends |
|---|---|
| 2026 | $1.2743 |
| 2025 | $1.6552 |
| 2024 | $1.5736 |
| 2023 | $1.4246 |
| 2022 | $1.0336 |
Project income from VTEB with the VTEB dividend calculator or track your full portfolio with the dividend tracker.