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Discover the benefits of CD laddering

Interest rates are either at or hovering around historic lows. That sure is good news for borrowers, but if you’re looking to build your savings it’s not so good, especially if you’re a conservative saver interested in preserving your principal. In higher-rate environments, certificates of deposit, or CDs, have proven to be a smart way to earn a higher yield with your money while having the assurance of FDIC insurance. But with rates so low, investing in longer-term CDs means locking in today’s historic low rates.

There is, however, a way you can still get the benefits of CDs while potentially enjoying higher returns. It’s called CD laddering. A CD ladder is an investment strategy whereby you buy several CDs that mature over several years, thereby providing you with access to your money and protecting you against interest rate risk. provides an example of CD laddering, using the image of rungs on a ladder. “The first rung of the ladder is the shortest period. If you have $100,000 to invest over a five-year period, you’d invest $20,000 into a one-year CD on the first rung. The second rung would be a two-year CD at another $20,000 and the third a three-year CD at $20,000. This continues up to five years. As each CD matures, the next moves up a year, allowing you to reinvest that money each year or use it for other expenses. Since CD rates are low, CD laddering gives you the opportunity to reinvest each year if yields rise.”

Why CD laddering?

There are some great benefits to using this investment strategy, including:

How to ladder CDs

Now that you know the benefits of CD laddering, how do you set up a portfolio that works for you? There are a few ways. offers these alternatives:

For more information on the benefits of CD laddering and to learn more about our great rates, stop by or call us.

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