You’ve received a cash windfall, and you have the deer-in-the-headlights look. What should you do first? It might be very tempting to splurge on items you couldn’t normally afford. Depending on your current financial obligations and goals, you may need to pay off debt or provide for your child’s education.

Windfalls can have both a positive and negative financial impact on your life. If you want your windfall to last, but are uncertain how to handle unexpected cash, it may be a good idea to tuck your money away and let it grow while you decide.

A high-yield CD is a great option when you need to think rationally about what to do with the money instead of making a spur-of-the-moment decision.

CDs Provide WillpowerBenefits of Putting Windfall into High-Yield CD

Whether your windfall is large or small, your willpower will certainly be tested. Financial experts caution against impulsively doing anything with a financial windfall and often recommend taking at least a few weeks, preferably a few months, before making any decisions.

The benefits of putting a windfall into a high-yield CD is that it buys you time to sort out your options and provides a reliable way to build your money. Typical CD terms range from three months to five years with longer terms generally offering higher yields.

Although it can be alluring to buy a CD with the longest term, you should be certain that you won’t need to withdraw the money because you’ll pay a penalty if you do. A short-term CD affords you more frequent access to your money in case you decide you want to use some of your windfall to pay off debt, further your education or take a vacation.

Climb the Ladder to Better Yields

Of course if you’re looking for both a short-term and long-term savings strategy, consider a CD Ladder. With a CD Ladder, you split your money among CDs designed to mature at different times, so you’re never too far away from at least some of your money and have access to your money at regular intervals. A CD ladder includes CDs with terms as long or as short as you like.

“Laddering is a form of diversification. By spreading your money among a range of maturity dates, you reduce the risk of not having access to your money or having all your money tied into one interest rate and CD maturity,” says Greg McBride, chief financial analyst for

Ally Bank can walk you through setting up a CD ladder from start to finish. You can also estimate your sample ladder earnings, using the quick calculator.

Ally Bank can help you make the most of your extra money with CDs that are consistently among the most competitive rates in the country, are FDIC insured up to the maximum allowed by law, and interest is compounded daily – which will help you grow your windfall faster.

Not everyone receives a money bonanza in their lifetime. With your money safely parked in CDs, you can concentrate on both short-term and long-term financial goals that can aid in building your overall wealth.

Tell us! What would you do with a sudden windfall? What short-term and long-term needs and goals would you want to achieve?