What Is A CD Ladder? And How It Can Help You Achieve Your Financial Goals…

By Minh Tong Reviewed by Nima Vahdat Updated Oct 17, 2023
What Is A CD Ladder? And How It Can Help You Achieve Your Financial Goals…

A CD ladder is a savings strategy by which you purchase several Certificates of Deposit (CDs) with staggered maturity dates.

A Certificate of Deposit (CD) ladder is a unique way to invest your money, allowing you to take advantage of short and long-term CDs. 

CD ladders don’t have fees, and they provide the liquidity and flexibility many people want from their investments.


  • A CD ladder spreads your investment across several CD terms.
  • You can reinvest the funds from a matured CD or withdraw them.
  • CD ladders can take a bit of work to track but may be very helpful for achieving your financial goals.

What is a CD Ladder?

If tying up your funds long-term in a CD worries, you should consider a CD ladder. 

The good news is they are easy to create, and anyone can do them in a few simple steps. They aren’t complicated, and you don’t need special skills to do well with them.

To simplify it, a CD ladder is a combination of CDs you invest in, spreading your money throughout various terms. 

The key to a good CD ladder is taking advantage of high-interest rates on longer-term CDs while keeping some of your money more liquid in shorter-term CDs.

A CD ladder is a compromise to investing all your money in long or short-term CDs. You get the best of both worlds and can decide how to use the funds as each CD matures.

How Does a CD Ladder Work?

A CD ladder can be for any amount (as long as you meet the bank’s minimum requirements) and for any term.

The key is to invest a portion of your funds in short-term CDs, usually 1-year, and then additional money in longer-term CDs, such as 2, 3, 4, and 5-year terms.

There’s no right or wrong way to build a CD ladder. You can choose the increments and how much money you invest in each to meet your financial goals.

An Example Of A CD Ladder

Here’s a quick visual to see how a CD ladder would work if you had $3,500 to invest.

You could break your investment into equal investments of $700 and do the following:

$700 in a 1-year CD

$700 in a 2-year CD

$700 in a 3-year CD

$700 in a 4-year CD

$700 in a 5-year CD

With this method, you have a CD maturing every year. You can withdraw the funds at maturity if you need them for a financial goal or reinvest them in another high-yield CD.

The Pros And Cons Of CD Ladders

CD ladders are a great way to grow your earnings, but like any personal finance decision, there are some pros and cons to consider.


  • You aren’t stuck in one long CD term: If interest rates drastically change, you can take advantage of them and not be stuck in a CD with a lower term. You may not access all your funds, but even some are a good compromise.
  • Your funds are liquid: You can access at least a portion of your funds regularly, usually annually. This reduces the risk of paying early withdrawal penalties if you withdraw funds early.
  • You have multiple options: You can invest your funds in many different CDs, giving you more opportunities for growth.


  • Interest rates aren’t always high on CDs: When your CDs mature, there’s no guarantee you’ll get high rates when you reinvest the funds. 
  • Some of your funds are tied up: You can’t access your funds without a penalty at most banks. You’ll pay an early withdrawal penalty if you need your funds before the maturity date.

What is the Minimum Deposit for CD Ladders?

Each bank has a different minimum deposit required for CDs. Some are as low as $500, and others are as high as $2,500. 

Read the fine print to ensure you can meet the requirements, especially if you’re splitting up your funds in a CD ladder. 

Not meeting the minimum requirements may make you ineligible for a CD, or you may not be eligible for the advertised interest rates.

Alternatives to CD Ladders

If CD ladders don’t sound like a good fit for you, there are other ways to invest your funds, including the following.

High-Yield Savings

A high-yield savings account may pay APRs close to what you could earn on a CD, and they don’t require you to invest for a certain length of time. 

You can withdraw funds without a penalty; however, you can’t excessively withdraw funds, or the bank may close your account.

ETFs or Stocks

If you want to take your chance in the stock market, you can invest your funds in stocks or ETFs (baskets of securities). 

These types of investments have a much higher risk, but you may get a greater return. They are also more liquid because you can sell your investments at any time; however, there’s no guarantee you’ll sell them for a profit.

Pay Off Debt

If you have a lot of high-interest debt, you may use your available funds to pay it off versus investing. 

Even though paying debt doesn’t feel like an investment, you save money on interest each time you pay your debt down. A solid debt relief plan is one of the best investments in yourself.

Final Thoughts On CD Ladders And Your Financial Goals

CD ladders may be a great option if you’re looking for ways to invest your money. 

Anyone can qualify for a CD ladder. You don’t need specific qualifications or knowledge. You just need enough money to deposit into each CD to reach the bank’s requirements and earn the high APYs. 

Shop around for the best CD rates to make the most of your opportunity and see how easy it can be to reach your financial goals.

At Americor, we understand the importance of managing your finances wisely. 

If high-interest debts are impacting your savings and financial well-being, explore our debt relief solutions, including debt settlement and debt consolidation, to regain control of your financial future.

If your debt has become unmanageable and you have difficulty making your debt payments each month, then you should consider negotiating a debt settlement and an affordable payment plan that suits your budget.

Talk to one of our certified Debt Consultants, for free, who can provide personalized advice tailored to your specific needs.

By taking proactive steps, you can put an end to your financial stress and work towards a brighter financial future. 

Remember, there is always hope for debt relief, and our team of experienced professionals are ready to guide you on your journey to regaining control of your finances.

For more information on Americor’s debt relief services, contact us today to see how we can help you eliminate your debts, and get on the fast-track to becoming completely debt-free!



Minh Tong

Minh leverages decades of experience in marketing, sales management and technology to provide high-level advice and lead new initiatives. Minh has a Bachelor of Science in Business/Managerial Economics from University of California at Irvine. He brings over 20 years of sales and executive management experience to the company and his responsibilities include customer service improvement, professional development, and carrying out communications and marketing. Originally from the east coast, Minh resides in southern California and enjoys spending time with his family, going to the beach, and playing a variety of sports.