Design a certificate of deposit ladder to maximize returns while maintaining regular liquidity.
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What Is a CD Ladder?
A CD ladder splits an investment across multiple CDs with different maturity dates. As each rung matures, reinvest in the longest available term to keep the ladder going. This gives regular access to a portion of your savings while capturing longer-term rates.
Are CDs safe?
CDs at FDIC-insured banks are covered up to $250,000 per depositor per institution.
What happens when a CD matures?
You have a 7-10 day grace period to withdraw or reinvest before auto-rollover at current rates.
How many rungs should I use?
3-5 rungs is most common. 5 rungs gives roughly 20% of your investment maturing each year.