There are many ways to ladder. It ultimately comes down to how much flexibility you want with withdrawing funds, and how long you want to deposit your money. Try building a CD ladder to see how it works.
Let's say you want to deposit
- into a CD for
- years. If you want the
high yield of longer-term CDs, but you also want
flexibility, try CD laddering. To ladder this deposit,
you'd open - separate CDs
with - each. As you can see
below, one of those CDs would mature every year. At
that point, you could either withdraw the funds, or
roll them into a new CD that would mature at your
original --year goal. In
- years time, you'd have a
total of -, plus yearly
accessibility. On the other hand, if you don't need
yearly accessibility to your funds, put the entire
- into a traditional
--year CD. After
- years, you'd have a
total of -.
The savings was calculated using your estimated deposit amount with the current APY. It’s just to illustrate your earning potential if you started laddering today. Remember, rates can change until you make an actual CD deposit—only then is the APY locked in.
Anything calculated or described in connection with calculator is for illustrative purposes only. The interest and APY earned amount is based on the advertised APY, and assumes that for the entire investment period, that the APY (which is variable) remains constant, principal and interest remain on deposit and there are no deposits or withdrawals. Interest is compounded daily and credited monthly.
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