Certificate of deposit (CD) laddering strategy

Typically you can receive higher crediting rates on a CD if you commit to leaving your money with the bank for a longer period of time. This lack of liquidity causes many people to choose shorter-term CDs at the expense of receiving the higher interest rates. CD laddering is a strategy that gives you the benefit of receiving the higher-interest crediting rates of longer term CDs but still provide you with some liquidity. For example, rather than deposit $60,000 for a one-year period and renewing each year at a lower one-year rate, you could create a three-year ladder and put $20,000 in a one-year CD, $20,000 in a two-year CD and $20,000 in a three-year CD at the higher interest rates. After the first year, you take the one-year CD and purchase a new three-year CD. After the second year, you take the initial two-year CD and purchase a new three-year CD, and do the same with the initial three-year CD. Starting in year four, you will have the three CDs receiving the benefit of a three year rate but also have access to 1/3 of your money each year without penalty should you need it. Use this calculator to determine the additional interest you could earn with a CD laddering strategy.
CD Information and Assumptions
Deposit amount ($) 
Interest compounding frequency 
Number of years for analysis 
Marginal tax bracket (%)help
CD Interest Rates
One year (%) 
Two year (if applicable) (%) 
Three year (if applicable) (%) 
Four year (if applicable) (%) 
Five year (if applicable) (%) 
Your Email Address
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