Savings, CDs and tax
CD Ladder Calculator
Split your savings across CDs that mature a year apart, so some money comes free every year while most of it earns long-term rates.
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A $50,000 five-year ladder at example rates: what each CD earns by maturity
| CD | Amount | APY | Interest by maturity |
|---|---|---|---|
| 1-year | $10,000 | 4.10% | $410 |
| 2-year | $10,000 | 3.95% | $806 |
| 3-year | $10,000 | 3.85% | $1,200 |
| 4-year | $10,000 | 3.80% | $1,609 |
| 5-year | $10,000 | 3.90% | $2,108 |
How this calculator works
A ladder splits one sum evenly across CDs of different terms, here one to five years. Each year one CD matures; you reinvest it in a new CD at the longest term.
After the first cycle every CD is a long-term CD earning the long-term rate, yet one still matures every year, so you are never more than a year from some of your money without paying a penalty.
The average APY while you build it weights each CD's APY by the money in it.
Questions people ask
What is a CD ladder?
Several CDs with staggered maturity dates, commonly one to five years apart. As each matures you reinvest it at the longest term, so you earn long-term rates while some money comes free every year.
Is a CD ladder a good idea?
It suits money you won't need all at once and want to lock in rates for: it balances rate and access. For money you may need any time, a high-yield savings account is simpler.
How many rungs should a CD ladder have?
Three to five is common. More rungs mean money comes free more often; the longest rung sets the rate the ladder earns once built.
What happens when a CD in the ladder matures?
Banks give a grace period, often around 7 to 10 days, to withdraw or change the CD before it renews automatically. Set a reminder so it doesn't roll into a lower rate.
Is my CD ladder insured?
At FDIC-insured banks and NCUA-insured credit unions, up to $250,000 per depositor, per institution, per ownership category, together with your other deposits there. Spreading rungs across banks can raise your coverage.
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Updated by the RateHerald team. The maths is tested against worked examples; report a problem.