Split your cash across staggered CDs so some matures every year — earning more than savings without locking it all away.
Total interest
$3,324
Across the 5-CD ladder.
Cash available after 12 months.
| CD | Amount | APY | Matures in | Value at maturity |
|---|---|---|---|---|
| 1-year | $5,000 | 4.60% | 1 yr | $5,230 |
| 2-year | $5,000 | 4.45% | 2 yr | $5,455 |
| 3-year | $5,000 | 4.30% | 3 yr | $5,673 |
| 4-year | $5,000 | 4.15% | 4 yr | $5,883 |
| 5-year | $5,000 | 4% | 5 yr | $6,083 |
Splitting $25,000 across 5 CDs maturing one year apart earns roughly $3,324 in total, a blended yield near 4.25%. Because a CD matures every year — the first is worth $5,230 after 12 months — you always have cash coming available without breaking any CD early.
A single long CD locks everything at one rate for one date; a savings account stays liquid but its rate floats. A ladder splits the difference — you capture higher CD rates on most of the money while keeping a portion maturing each year. As each rung matures, you reinvest it into a new long CD, keeping the ladder rolling at current rates.
The strategy works best on autopilot: when the 1-year CD matures, roll it into a new longest-term CD. Repeat annually and you end up holding all long-term CDs (which usually pay more) while still having one mature every year. If you need the cash instead, you take the maturing rung without any early-withdrawal penalty.
A ladder is one option for cash you won't need all at once. Compare a single CD's simplicity or a savings account's full liquidity to decide what fits — it depends on when you'll need the money and where rates are headed.
CD calculatorWorked scenarios with the full analysis, so you can see how the numbers move before entering your own.
The classic five-rung ladder with one CD maturing each year from one to five.
Total interest
$3,324
Splitting $25,000 across 5 CDs maturing one year apart earns roughly $3,324 in total, a blended yield near 4.25%. Because a CD matures every year — the first is worth $5,230 after 12 months — you always have cash coming available without breaking any CD early.
A single long CD locks everything at one rate for one date; a savings account stays liquid but its rate floats. A ladder splits the difference — you capture higher CD rates on most of the money while keeping a portion maturing each year. As each rung matures, you reinvest it into a new long CD, keeping the ladder rolling at current rates.
The strategy works best on autopilot: when the 1-year CD matures, roll it into a new longest-term CD. Repeat annually and you end up holding all long-term CDs (which usually pay more) while still having one mature every year. If you need the cash instead, you take the maturing rung without any early-withdrawal penalty.
A shorter ladder for someone who wants access sooner and less commitment.
Total interest
$1,095
Splitting $12,000 across 3 CDs maturing one year apart earns roughly $1,095 in total, a blended yield near 4.46%. Because a CD matures every year — the first is worth $4,188 after 12 months — you always have cash coming available without breaking any CD early.
A single long CD locks everything at one rate for one date; a savings account stays liquid but its rate floats. A ladder splits the difference — you capture higher CD rates on most of the money while keeping a portion maturing each year. As each rung matures, you reinvest it into a new long CD, keeping the ladder rolling at current rates.
The strategy works best on autopilot: when the 1-year CD matures, roll it into a new longest-term CD. Repeat annually and you end up holding all long-term CDs (which usually pay more) while still having one mature every year. If you need the cash instead, you take the maturing rung without any early-withdrawal penalty.
Short-term CDs paying more than long — a ladder still smooths reinvestment risk.
Total interest
$4,117
Splitting $30,000 across 5 CDs maturing one year apart earns roughly $4,117 in total, a blended yield near 4.38%. Because a CD matures every year — the first is worth $6,300 after 12 months — you always have cash coming available without breaking any CD early.
A single long CD locks everything at one rate for one date; a savings account stays liquid but its rate floats. A ladder splits the difference — you capture higher CD rates on most of the money while keeping a portion maturing each year. As each rung matures, you reinvest it into a new long CD, keeping the ladder rolling at current rates.
The strategy works best on autopilot: when the 1-year CD matures, roll it into a new longest-term CD. Repeat annually and you end up holding all long-term CDs (which usually pay more) while still having one mature every year. If you need the cash instead, you take the maturing rung without any early-withdrawal penalty.
A larger cash reserve laddered to earn CD rates while keeping annual liquidity.
Total interest
$6,824
Splitting $50,000 across 5 CDs maturing one year apart earns roughly $6,824 in total, a blended yield near 4.36%. Because a CD matures every year — the first is worth $10,450 after 12 months — you always have cash coming available without breaking any CD early.
A single long CD locks everything at one rate for one date; a savings account stays liquid but its rate floats. A ladder splits the difference — you capture higher CD rates on most of the money while keeping a portion maturing each year. As each rung matures, you reinvest it into a new long CD, keeping the ladder rolling at current rates.
The strategy works best on autopilot: when the 1-year CD matures, roll it into a new longest-term CD. Repeat annually and you end up holding all long-term CDs (which usually pay more) while still having one mature every year. If you need the cash instead, you take the maturing rung without any early-withdrawal penalty.
A CD ladder splits your money across several CDs with staggered maturity dates — for example, equal amounts in 1-, 2-, 3-, 4- and 5-year CDs. Each year one CD matures, giving you access to a portion of your money without an early-withdrawal penalty. When it matures, you reinvest it into a new longest-term CD, so the ladder keeps rolling.
The point is to get most of the higher yield of long-term CDs while keeping regular access to cash. After the first few years, you hold all long-term CDs (which typically pay more) but still have one maturing every year. It's a simple, low-risk way to manage cash you won't need all at once.
A ladder suits money you want safe and mostly locked but with some access — a large cash reserve, a house down payment a few years out, or a conservative slice of a portfolio. It also hedges reinvestment risk: because you reinvest a portion every year, you're never forced to lock your entire balance at a single moment's rate, whether rates rise or fall.
It's not for an emergency fund, which needs full, immediate liquidity — a high-yield savings account is better there. And if you're confident rates are about to fall, a single long CD locks today's rate on everything, which can beat a ladder. The ladder's strength is precisely that it doesn't require you to guess the direction of rates.
An emergency fund needs full, immediate liquidity. A ladder only frees one rung a year — use high-yield savings instead.
The strategy relies on rolling each matured CD into a new long-term one. Letting rungs sit in cash breaks the ladder's yield advantage.
A five-year ladder locks money for years. Match the ladder length to when you'll actually need the funds.
CDs often auto-renew at maturity, sometimes at poor rates. Track maturities and reinvest deliberately.
For modest sums, a single CD or high-yield savings is simpler and nearly as effective. Ladders shine on larger reserves.
A CD ladder is a strategy of splitting money across several CDs with staggered maturity dates — say 1 through 5 years. One CD matures each year, giving you access or the chance to reinvest at current rates, while the rest keeps earning higher long-term rates. It balances yield and liquidity.
Divide your money into equal parts and buy CDs of increasing term — for a five-year ladder, one each of 1, 2, 3, 4 and 5 years. As each matures, reinvest it into a new longest-term (5-year) CD. After a few years you hold all long-term CDs but still have one maturing annually.
It's a good fit for cash you want safe and mostly locked but with periodic access — a reserve, a medium-term goal, or a conservative portfolio slice. It captures most of the yield of long CDs while keeping annual liquidity and hedging against locking everything at one rate. It's not right for an emergency fund, which needs full liquidity.
It's the average return across all the rungs, weighted by their terms. Because a ladder mixes shorter and longer CDs, the blended yield sits between the shortest and longest rates. This calculator estimates it from the rates you enter, so you can compare a ladder against a single CD or savings account.
You can access each rung penalty-free when it matures — which happens once a year in a standard ladder. If you need money before a rung matures, you'd break that CD and pay an early-withdrawal penalty, though you'd only break the one you need, not the whole ladder. That partial access is a key advantage over a single large CD.
The next calculations that usually follow this one.
See what a CD grows to at maturity, the interest you earn, and how it compares to leaving cash idle.
Project your balance with monthly deposits — and see how much a high-yield account earns over a big-bank one.
See the interest a balance earns, and how much extra compounding adds over simple interest.
Turn a stated interest rate and compounding frequency into the real annual percentage yield you'll earn.
Work backwards from the number you need to the monthly amount that gets you there.
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