CD Ladder Calculator

Frequently Asked Questions

What is a CD ladder?

A CD ladder splits a lump sum across multiple CDs with staggered maturity dates — for example, 1-year, 2-year, 3-year, 4-year, and 5-year CDs. As each CD matures, you reinvest in a new long-term CD. This gives you both liquidity (a CD maturing each year) and access to higher long-term rates.

Why not just put everything in the longest-term CD?

Locking all your money in a 5-year CD means you cannot access it without penalties if you need funds or rates improve. A ladder provides partial liquidity every year while still capturing most of the yield benefit of longer terms.

What happens when a CD in the ladder matures?

You reinvest the matured CD into a new long-term CD (typically matching the longest rung in your original ladder). Over time, all your CDs will be in the longest term, maximizing yield while maintaining the annual liquidity cycle.

Are CDs FDIC insured?

Yes. CDs at FDIC-insured banks are covered up to $250,000 per depositor per institution. If your ladder total exceeds that at a single bank, spread across multiple banks or use credit unions (which are NCUA-insured up to the same limit).

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