Bond Ladder Treasury Calculator
A Treasury bond ladder staggers maturities so part of your portfolio matures every year, providing predictable income and reinvestment opportunities. Build a 5- or 10-year ladder with this calculator and see the average yield, total annual income, and rollover schedule.
A bond ladder Treasury calculator is a free tool that splits a lump sum across several Treasury maturities and shows the income each rung pays, the blended yield, and when each one matures for reinvestment. Laddering keeps part of your money maturing every few months, so you can roll into new rates without selling at a loss.
Why A Bond Ladder?
Bond ladders solve two problems: reinvestment risk (rates drop and you need to roll into lower yields) and duration risk (rates rise and existing bonds lose market value). By staggering maturities, you always have a bond maturing soon — providing predictable cash and natural rebalancing opportunities.
Treasury Auctions And Direct Buying
Build a ladder by buying Treasuries direct from TreasuryDirect.gov at auction (no fees) or in the secondary market through a brokerage. Available maturities: 4, 8, 13, 17, 26, 52-week bills; 2, 3, 5, 7, 10-year notes; 20, 30-year bonds. TIPS provide inflation-adjusted ladders.
How To Build A Treasury Ladder Step By Step
- Pick the ladder length. Cash you may need within a year suits a 3/6/9/12-month bill ladder; money earmarked for 5+ years suits a 1–5 year note ladder. The longest rung sets your rate exposure.
- Divide evenly into rungs. $50,000 across five rungs is $10,000 each. Equal rungs keep the reinvestment schedule predictable — uneven rungs concentrate your roll risk into one date.
- Buy at auction or in the secondary market. TreasuryDirect sells bills, notes and bonds in $100 increments with a $100 minimum and no commission. A brokerage costs slightly more on the spread but lets you sell early and hold everything in one account.
- Set the roll. When a rung matures, reinvest at the longest rung of the ladder. That single rule is what keeps average maturity constant and turns the ladder into a self-sustaining income stream. TreasuryDirect can auto-reinvest bills for you.
Run the calculator once per candidate ladder length. A 1–5 year ladder usually yields more than a 3–12 month one, but locks capital longer; the numbers make the trade explicit rather than theoretical.
Treasury Ladder vs Bond Fund vs CD Ladder
- Individual Treasury ladder — you hold to maturity, so you get your principal back on a known date regardless of what rates did in between. Interest is exempt from state and local income tax.
- Bond fund or ETF — no maturity date, so a rate rise is a permanent mark-down until yields recover. Convenient and liquid, but it cannot promise you a specific sum on a specific date, which is precisely what a ladder is for.
- CD ladder — FDIC-insured to $250,000 per depositor per bank, often competitive on yield, but interest is fully state-taxable and early withdrawal usually costs several months of interest.
Rule of thumb: if you have a date-certain need — tuition, a house deposit, four years of retirement spending — the ladder wins because it matches cash flows to dates. If you simply want bond exposure with no specific date, a fund is less work.
State Tax Advantage
Treasury interest is federally taxable but state-tax-exempt. For a high-tax state resident (California 13.3%, New York 10.9%), a 4.5% Treasury yields ~5.2% on an after-tax-equivalent basis vs. a corporate bond. This makes Treasury ladders more attractive in high-tax states.
Source: TreasuryDirect.gov yield curve data, IRS Publication 550 on Treasury taxation, Wade Pfau bond ladder retirement income research. Last updated: May 2026.