Have you tried laddering?

Is CD laddering for you?

Pink background with variety of ladders

Here’s a proven strategy to earn high yields with the safety of federally insured deposits; laddering your investments. You earn more but maintain flexibility in case rates go up, or if you need funds for unexpected expenses. 

Because you’re investing your money for an agreed period of time, Certificates of Deposit offer significantly higher returns than savings. But, keep in mind that if you invest all your funds in a single CD, you cannot withdraw your funds before the CD matures without paying a penalty.

Laddering solves this dilemma. Rather than one large CD, you split your investment in multiple CDs with staggered maturity dates. As each CD matures, you can reinvest them at current rates or access them if you need them.

Here’s an illustration of a CD ladder with five “rungs.” Each rung is a CD of equal value, with staggered terms so one CD matures every 6-12 months:

  • $1,000 in a 6-month CD
  • $1,000 in a 12-month CD
  • $1,000 in a 18-month CD
  • $1,000 in a 24-month CD
  • $1,000 in a 36-month CD


Whenever a CD matures, purchase a new 36-month CD. This ensures you get the high returns of longer-term CDs with the flexibility of having one-fifth of your investment available every 6-12 months.

If you can invest your funds for a full year, consider CDs with 12-months between them. Or, if you may need your money sooner, build your ladder so that one CD matures each month.

When rates are uncertain, a CD ladder may be the safest overall plan. This way, you can roll your funds into CDs offering better rates when and if they become available. But if interest rates are falling, you can choose to invest in longer-term CDs to lock in higher rates while they’re available. Most economists expect rates to continue rising in the near term, so a shorter-term CD ladder will allow you to  keep your options open.

Laddering advantages

Earn more without tying up all of your funds for long periods
As your CDs mature, you'll still earn higher long-term CD rates but still have frequent access to your cash. 

Adjust your strategy to market conditions
Determine how you’ll reinvest based on current market rates and your financial situation.

Federally-insured safety
Funds are insured to $250,000 by the National Credit Union Administration (NCUA)

Peace of mind
Regardless if rates drop or rise, you’re covered. You've locked in your return on longer CDs, and can reinvest when rates are rising.

Please call us or stop by our office to learn about the many options available to you.