{"id":12228,"date":"2017-12-13T09:00:08","date_gmt":"2017-12-13T17:00:08","guid":{"rendered":"http:\/\/www.marketriders.com\/investing\/?p=12228"},"modified":"2017-12-13T09:00:08","modified_gmt":"2017-12-13T17:00:08","slug":"investor-facts-what-is-a-cd-ladder","status":"publish","type":"post","link":"https:\/\/www.marketriders.com\/investing\/investor-facts-what-is-a-cd-ladder\/","title":{"rendered":"Investor Facts: What Is A CD Ladder?"},"content":{"rendered":"<p>A CD ladder is a method of investing in certificates of deposit (CDs) that helps you\u00a0earn some interest now while reducing the risk of missing higher rates later.<\/p>\n<p>CD issuers such as banks reward savers for choosing longer maturities, that is, for locking up their cash for longer periods, even multiple years.<\/p>\n<p>But\u00a0your money could end up stuck\u00a0in a lower-rate CD during a period when <a href=\"https:\/\/www.marketriders.com\/investing\/investor-facts-interest-income\/\">interest rates<\/a> rise.<\/p>\n<p><img loading=\"lazy\" class=\"alignnone size-large wp-image-12232\" src=\"https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2017\/11\/ladder-434523_1920-800x537.jpg\" alt=\"cd ladder\" width=\"640\" height=\"430\" srcset=\"https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2017\/11\/ladder-434523_1920-800x537.jpg 800w, https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2017\/11\/ladder-434523_1920-300x201.jpg 300w, https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2017\/11\/ladder-434523_1920-768x515.jpg 768w, https:\/\/www.marketriders.com\/investing\/wp-content\/uploads\/2017\/11\/ladder-434523_1920.jpg 1920w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/><\/p>\n<p>A CD ladder allows you to\u00a0invest today and still get those higher rates down the road.<\/p>\n<p>The very old-fashioned tactic of CD laddering is essentially splitting up your\u00a0money equally among five CDs.<\/p>\n<p>For example, a CD ladder might have:<\/p>\n<ul>\n<li>20%\u00a0of your money in\u00a0a 12-month CD<\/li>\n<li>20%\u00a0in a nine-month CD<\/li>\n<li>20%\u00a0in a six-month CD<\/li>\n<li>20%\u00a0in a three-month CD<\/li>\n<li>and, finally, 20%\u00a0in a regular bank\u00a0savings account<\/li>\n<\/ul>\n<p>The idea of a ladder is to create a situation in which one\u00a0CD comes due every three months. First, the three-month CD matures. Then the six-month CD, etc.<\/p>\n<p>As the months pass,\u00a0each\u00a0CD moves\u00a0closer to its maturity, or\u00a0expiration, date. Every 90 days, one\u00a0CD moves down the line and releases your cash to be spent\u00a0or reinvested.<\/p>\n<p>If the money is needed to resupply your savings account, do so. Otherwise, take the CD that just came due and buy a new\u00a012-month CD.<\/p>\n<h2>Constant rebuild<\/h2>\n<p>Another\u00a090 days passes and the new, 12-month CD has nine\u00a0months left to go, the nine-month has six, and\u00a0so on. You constantly rebuild the CD ladder as time passes.<\/p>\n<p>If rates move higher you\u2019ll have access to the money and be able to capture those better payouts.<\/p>\n<p>Banks, of course, would prefer that you purchase\u00a0longer <a href=\"https:\/\/www.marketriders.com\/investing\/how-to-buy-a-bond-etf-in-this-market\/\">maturities<\/a> while rates are low, since that\u00a0would be great deal for them. They get to borrow your money cheaply and lend it out at higher interest to others.<\/p>\n<p>A CD ladder\u00a0is admittedly a somewhat boring way to\u00a0earn\u00a0<a href=\"https:\/\/www.marketriders.com\/investing\/investor-facts-yield\/\">yield<\/a>, but it works.<\/p>\n<p><small><i>MarketRiders, Inc. is a registered investment adviser.\u00a0 Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.\u00a0 Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and\/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.<\/i><\/small><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A CD ladder is a method of investing in certificates of deposit (CDs) that helps you\u00a0earn some interest now while reducing the risk of missing higher rates later. CD issuers &hellip; <a href=\"https:\/\/www.marketriders.com\/investing\/investor-facts-what-is-a-cd-ladder\/\">Read more <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":8,"featured_media":12232,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_wp_rev_ctl_limit":""},"categories":[65],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v19.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Investor Facts: What Is A CD Ladder? | MarketRiders<\/title>\n<meta name=\"description\" content=\"A CD ladder is a method of investing in certificates of deposit that helps you earn some interest now while reducing the risk of missing higher rates later.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.marketriders.com\/investing\/investor-facts-what-is-a-cd-ladder\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Investor Facts: What Is A CD Ladder? 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