Combining long- and short-term Certificates of Deposit (CDs) is known as CD laddering. For example, rather than put $40,000 into a four-year CD, you might put $10,000 into four separate CDs—a one-year, an eighteen-month, a three-year and a four-year. When the first CD matures, you reinvest it in a four-year CD, repeating the process with the others as they become due. This CD rotation provides you with regular access to your money and allows you to take advantage of CD interest rates.
A CD ladder can cover whatever time frame works for you. Ally Bank CDs are available in a wide range of terms so you can build a CD ladder that best suits your needs. If you'd like to be able to access your money earlier you can use three-, six-, or nine-month CDs. It is not uncommon for retirees to build a four- or five-year CD ladder, but there's nothing wrong with a 15-year time frame, using a combination of CDs. The idea behind a CD ladder is that it can provide you with a steady and secure income stream.
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At Ally Bank, we are committed to making saving as easy, secure and rewarding as it can be. There's no minimum deposit to open any of our accounts and all of our CDs are backed by the Ally Bank Ten Day Best Rate Guarantee. Learn more at Allybank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.