CD Ladder

A CD (Certificate of Deposit) ladder is a strategy to maximize interest earnings while maintaining access to your money. Instead of putting all your savings in one CD, you split it across multiple CDs that mature at different times.

How It Works: Let's say you have $10,000. Instead of one 5-year CD, you create a ladder:

• $2,000 in a 1-year CD (4.5% APY)
• $2,000 in a 2-year CD (4.7% APY)
• $2,000 in a 3-year CD (4.9% APY)
• $2,000 in a 4-year CD (5.0% APY)
• $2,000 in a 5-year CD (5.2% APY)

Each year, as one CD matures, you reinvest it into a new 5-year CD at the top of the ladder. After the initial setup, you'll have access to money every year while earning the higher rates of long-term CDs.

Benefits:

• Higher interest than savings accounts
• Regular access to portions of your money
• Reduced risk of locking in low rates
• FDIC insured up to $250,000

Best For: Emergency funds beyond 3-6 months, house down payment savings 2-5 years out, or any medium-term savings goal where you want better returns than a savings account but guaranteed principal.