If you’re looking for a way to diversify your savings strategy, try “laddering” our great CDs.
“CD laddering,” it’s a flexible and easy-to-implement concept that is extremely effective.
How it works:
You decide upon an amount you want to invest, let’s say $10,000. Next, divide the total into a variety of terms – with different maturation dates. You could, for example, choose to invest $2,500 in a six-month CD; $2,500 in 12-month CD; $2,500 in a 36-month CD; and, $2,500 in a 60-month CD.
Laddering enables you to have cash access as the shorter-term CDs come due – in case you need your money – or want to reinvest in a longer term at a higher rate. You’re also taking advantage of rates at a higher APY – but not tying up all your funds for an extended period.
Laddering also gives you peace of mind, especially in a rising rate environment.
You have more flexibility while earning a competitive APY, and greater accessibility as your array of laddered CDs come due.