It’s a group of FDIC-insured, guaranteed rate CDs working together as one investment, so you know it’s safe and it comes with a return you can depend on. A CD ladder employs the time-tested strategy commonly referred to as “laddering” to spread your total investment among several individual CDs with terms ranging from short (6 to 18 months) to longer (24 to 60 months). This combination of CDs works together to provide higher immediate returns while eliminating the interest rate guesswork from your CD purchase decision.
About CD laddering
Laddering is based upon the premise of not putting all your eggs in one basket or in this case, all your money in a single CD. A CD ladder is a group of FDIC insured, guaranteed rate CDs working together as one investment. Your total investment is spread among several individual CDs with terms ranging from short to long (terms range from 6 – 120 months). This combination of CDs works together to provide higher immediate returns while eliminating the interest rate guesswork from your CD purchase decision. Plus, a CD ladder can be tailored to best meet your specific savings goals.
View a Short-Term CD Ladder Example
View a Long-Term CD Ladder Example
CD ladder benefits
- A high blended rate right from the start: When you blend or average the rates paid on each of the CDs in your ladder, you see the immediate benefit of earning a higher blended interest rate from the start.
- Access to a portion of your money every 6 or 12 months: When opening a CD ladder, you decide how much and how often you want money to be available to you. Know that you are prepared for interest rate changes, whether up or down If interest rates go up, you can take advantage of the change because a portion of your CD ladder investment is available to be reinvested every 6 or 12 months. On the other hand, if interest rates go down, you won't suffer an abrupt decrease in your interest earnings because several of the CDs in your ladder will continue to earn at the higher rates you previously locked in.
- Dependable return that comes with guaranteed rate CDs: You cannot and will not ever lose the principal invested in your Dollar Bank CD Ladder, unlike some investments in the stock market or mutual funds. The amount of money that you use to open your CDs, as well as the interest you earn on the balance, is guaranteed.
- No fees or service charges: Unlike most investment alternatives, there are no management fees, sales loads, or other charges for this account.
A CD ladder can be started with as little as $3,000.
Yes, you can put a CD ladder to work as part of your retirement savings strategy and an IRA can be opened with as little as $1,500. Once you’ve opened a Traditional, Roth, or Education IRA at Dollar Bank, you can choose to invest your funds in a CD ladder. It’s the perfect way to take the worry out of investing in the nest egg you’ve already accumulated. An IRA CD ladder is also a great vehicle for making annual contributions because you will be able to add money to your ladder every 6 or 12 months.
Absolutely. Whether you’re looking to boost your monthly earnings immediately, establish a long-term savings strategy or are saving for a specific goal or purchase down the road, a CD ladder can be tailored to meet your savings objective.
If you have a specific date in mind that you are saving toward you can reinvest the CDs in your ladder so their final maturity dates coincide with your goal date. You’ll have the higher returns you want and all of your money available when you need it.
If you want ongoing growth for your long-term savings strategy, choose an extended renewal option. As each CD matures it is automatically renewed into the longest term CD you have. This continues your ladder and takes advantage of higher rates typically found on longer-term CDs while maintaining your 6 or 12-month access to your money. This option is also perfect for IRAs.