CD Ladder

  • Why build a CD Ladder? 1 of 5

    Building a CD Ladder lets you take advantage of the best of short and long term CDs.

    • Short Term CD

      Shorter terms have lower rates but provide more frequent access to your money.

    • Long Term CD

      Longer terms earn more but provide less frequent access to your money.

    • CD Ladder — the Best of Both

      The CD Ladder combines long term earnings with more frequent access to a portion of your money.

  • How to start a CD Ladder 2 of 5

    Starting a CD Ladder is easy. Let's use $30,000 and build a sample 3 year ladder.

    Divide the money evenly and open 3 CDs with ascending terms 12 months apart. You'll benefit from:

    • Access to a portion of your funds every 12 months as your CDs mature
    • Increased earning power of the 2 and 3 year CDs

    Though we're using a 3 year ladder for our illustration, you can grow your money ever more with a longer term ladder.

  • At the end of the first year 3 of 5

    Over the course of a year, your CDs will grow. When your 12 month CD matures, you can choose to take your money if you need to — or you can keep your ladder going by renewing your CD.

    Renew into the longest term CD

    Longer terms generally pay better rates, so you'll continue your ladder by renewing into a new 3 year CD, purchased at current rates. And you'll repeat this step when your 2 and 3 year CDs mature.

  • Your ladder going forward 4 of 5

    Once all the original CDs have been renewed, the ladder is on autopilot. The CDs in our example will continue to renew automatically into 3 year CDs, one maturing each year, for as long as you'd like. And you'll benefit from 3 year rates while still having access to a portion of your funds annually.

  • How do I plan my ladder? 5 of 5

    Now that you understand the basics, you can choose one of the tools below to help you plan a CD Ladder of your own.

    Want to go straight to results?
    Use our Quick Calculator to see your estimated balance growth.

    Need a little more help?
    Use our Step by Step Guide to plan and build a ladder from the ground up.