As a prudent retiree, you're looking for low-risk places to keep your money, yet you want to be sure you have the regular income you need for a comfortable lifestyle. Certificates of deposit (CDs) are savings products that can help you make the most of your cash while keeping risk at a minimum. So as you consider the best CD account strategy to meet your goals, take a look at CD laddering.
CD laddering allows you to take advantage of the potentially higher rates paid on longer-term CDs, while giving you regular access to maturing CDs. When you ladder your CDs, you simply stagger the dates your CDs mature. Your money becomes available to you on a regular basis to either use or re-deposit. For example, instead of depositing $15,000 into one three-year CD, you could divide it into three $5,000 CDs with one-year, two-year and three-year respective term lengths.
Laddering offers you flexibility to manage your money as rates fluctuate over time. You can diversify your CD ladder by incorporating some long-term CDs to hedge against falling interest rates, along with short-term CDs that allow you to take advantage of rising interest rates. In addition, you could consider including Raise Your Rate CDs in your ladder. With these CDs, you have the option of a one-time rate increase if our 2-Year CD rate goes up; you have the option to increase your rate twice (two times) if our 4-Year CD rate goes up.
Once you understand how to build a CD ladder, use a CD ladder calculator like the one on Bankrate.com to estimate your earnings and help you set your strategy. Then open and fund your Ally Bank CDs with any amount. Find out more at AllyBank.com or call live, 24/7 customer care at 877-247-ALLY (2559) today.
Ally Bank, member FDIC