CD Ladder Calculator
A CD ladder splits your money across CDs of different lengths, so cash frees up regularly while most of it earns long-term rates. Enter your amount and rates to see your ladder.
How a CD ladder works
Split $20,000 into five $4,000 CDs maturing in 1, 2, 3, 4, and 5 years. Every year a rung matures: spend it if needed, or roll it into a new 5-year CD at the top of the ladder. After the first cycle, every dollar earns 5-year rates while a rung still matures every single year.
Liquidity of a 1-year CD + (eventually) the rate of a 5-year CD
Why ladder instead of one CD
- Rate-risk insurance both directions: if rates rise, next year's maturing rung catches the new rates; if they fall, most of the money is already locked in high.
- No big early-withdrawal penalty risk: needing cash means waiting months for the next rung, not breaking a 5-year CD (penalties typically eat 3–12 months of interest).
- Inverted-curve note: when short CDs pay more than long ones (as in the default numbers), ladders lose some appeal versus rolling short CDs — but the ladder still hedges reinvestment risk when short rates eventually drop.
Where ladders fit
Money needed in 1–5 years with zero risk tolerance: house down payment, planned tuition, a known big expense. Not for emergency funds (not liquid enough — use high-yield savings) and not for 20-year money (stocks historically beat CD rates by a wide margin).
Frequently asked questions
What is a CD ladder?
Splitting savings across CDs of staggered maturities (e.g., 1–5 years). One matures every year for spending or reinvestment at the long end, combining regular access with long-term rates.
Is a CD ladder worth it?
For safe money needed over the next 1–5 years, usually yes — it hedges rate moves in both directions. When short-term rates exceed long-term (inverted curve), simply rolling 1-year CDs can compete.
What happens when a CD matures?
A short grace window (usually 7–10 days) to withdraw or move it; otherwise most banks auto-renew at the current rate. Calendar the maturity dates — auto-renewal rates are often poor.
Are CDs safe?
US bank CDs carry FDIC insurance up to $250,000 per depositor per bank (NCUA at credit unions). The risk is not loss but lock-up: early withdrawal costs months of interest.
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Last updated: 2026-07-08