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Short-Term CD Ladder

Perhaps your goal today () is to maximize your earnings on a sum of money that you won’t need for three years to fund a wedding, college education or use as a down payment on a new house (). You could choose a 36-month CD and hope that interest rates don’t rise or that you don’t need access to your money, as your savings will be locked in for three years. Or, you could choose to buy and renew a 12-month CD during each of the next three years, but you would be sacrificing the higher returns usually offered with longer-term CDs.

The CD ladder offers many options to help you reach your goal. It makes saving easy and offers access to your money if you should need it prior to your goal date, or to take advantage of rising interest rates. For example, Dollar Bank can open three CDs for you with terms of 12, 24, and 36 months. Each of these CDs will earn interest at its current rate, creating a blended rate that is higher than the shortest CD in your ladder. So, you start earning more on your entire balance from the very first day your CD ladder is open.

Following is a timeline of the 3/12 CD Ladder with a goal renewal option.

Please note: the rates shown below are examples only. View our current CD rates.

October 20211.00% APY1.50% APY2.00% APYBracketBlended rate* 1.50%
 12 months24 months36 months
October 20221.50% APY  BracketBlended rate* 1.67%
 24 monthsHourglass with 12 months remainingHourglass with 24 months remaining
October 2023 1.00% APY BracketBlended rate* 1.50%
 Hourglass with 12 months remaining12 monthsHourglass with 12 months remaining
October 2024  
 All three CDs reach maturity.  

One year after your purchase date (), your 12-month CD is maturing. We will reinvest this CD into a 24-month CD. You will benefit from an APY that is likely to be higher than the current 12-month rate at that time and this CD will mature on your goal date (). Your remaining CDs have 12 months and 24 months remaining until maturity.

After the second year (), your original 24-month CD is maturing. We will reinvest this CD into a 12-month CD. At this point, each of your three CDs has 12 months until maturity and will mature on your goal date () so you have the money you need when you need it!

Learn about long-term CD ladders.

*Blended Rate: This is the weighted average interest rate of each of the individual certificates in your CD ladder for the next liquidity period. Over time, as interest earnings are credited to your individual CDs or you increase or decrease the amount of an individual CD that is renewing, the blended rate you are earning will be updated to reflect these changes. The rates and terms shown are for purposes of example only and do not reflect actual rates and terms offered by Dollar Bank. The example assumes rates remain constant, however actual rates may vary substantially over time.