CD Laddering Calculator
Build a Certificate of Deposit (CD) ladder. See your total return, blended yield, and the rollover schedule. CD ladders give you locked-in rates plus annual liquidity at every rung.
Ladder Composition
What Is a CD Ladder?
A CD ladder is a strategy of dividing your money equally across multiple Certificates of Deposit (CDs) with different maturity dates — typically 1, 2, 3, 4, and 5 years. As each CD matures, you reinvest it into a new long-term CD at the back of the ladder. After the ladder is mature, you have one CD coming due each year, giving you regular access to a portion of your money while still earning the higher long-term CD rates on the rest. CDs are FDIC-insured up to $250,000 per depositor per insured bank, so principal is fully protected (source: FDIC, fdic.gov).
Why Build a CD Ladder Instead of One Big CD?
A CD ladder solves three problems simultaneously. First, liquidity: a 5-year CD locks your money for 5 years; a 5-rung ladder gives you access to 1/5 of your money every year. Second, rate risk: putting everything into a 5-year CD means missing out if rates rise, and a 1-year CD means missing the longer-term yield premium. The ladder spreads the risk. Third, opportunity cost: when one rung matures each year, you can use that cash for unexpected needs, redeploy to better rates, or just keep building the ladder. Top brokered CD platforms (Fidelity, Vanguard, Schwab) make building ladders easy with no fees.
CD Ladder vs High-Yield Savings vs Treasury Bills
High-yield savings accounts (HYSAs) currently yield 4.5-5.0% APY in 2026 with full liquidity but variable rates that can drop overnight when the Fed cuts. CDs lock in current rates — protecting against future rate cuts — but charge early-withdrawal penalties (typically 6 months of interest). Treasury Bills (T-Bills) yield similarly to short-term CDs (4.0-4.5% in 2026) and are state-tax-exempt, making them better than CDs for residents of high-tax states (CA, NY). For the safety-first portion of your portfolio, a CD ladder makes most sense when you have specific timeline needs (down payment in 3 years, college tuition in 5 years) and want a guaranteed locked-in return.
2026 CD Rate Outlook and Strategy
The Federal Reserve cut rates 4 times during 2024-2025, bringing the federal funds rate to 4.00-4.25% by early 2026. CD rates have followed: 1-year CDs offer 4.0-4.75% APY at top banks (Marcus, Ally, Capital One 360, Synchrony) and 5-year CDs offer 3.90-4.25%. The current yield curve is slightly inverted in the CD market (short-term rates higher than long-term), which is unusual — it reflects expectations of further Fed cuts. Strategy: bias your ladder toward shorter rungs (1-3 years) to capture today's higher yields, and lock 4-5 year rungs only if you specifically need that timeline. Last updated: April 2026.
Frequently Asked Questions
What is a CD ladder?
A CD ladder is dividing your money equally across multiple CDs with staggered maturity dates (e.g., 1, 2, 3, 4, 5 years). One CD matures each year, giving you regular access to part of your money while earning higher long-term rates on the rest (source: FDIC consumer guide).
How much money do I need to build a CD ladder?
Most banks require minimum CDs of $500 to $5,000 per CD. A 5-rung ladder needs at least $2,500 to $25,000 total. Brokered CDs at Fidelity/Vanguard/Schwab often have $1,000 minimums per CD.
What happens when a CD in my ladder matures?
You can take the cash, roll it into a new same-term CD (creating a new top rung), or move it elsewhere. Most laddering strategies roll the matured CD into the longest rung — converting a 1-year matured CD into a new 5-year CD — to maintain the ladder structure.
Are CDs FDIC-insured?
Yes. CDs at FDIC-insured banks are protected up to $250,000 per depositor per bank per ownership category. For amounts above $250,000, ladder across multiple banks to keep all funds insured.
What's the early withdrawal penalty on a CD?
Typical penalties are 3 months of interest on CDs under 1 year, 6 months of interest on 1-5 year CDs, and 12 months of interest on CDs longer than 5 years. Some banks offer 'no-penalty' CDs at slightly lower rates if you need flexibility.
CD ladder vs Treasury Bills — which is better?
For high-tax-state residents (CA, NY, NJ), Treasury Bills are usually better because they're exempt from state and local income tax. For other states, CDs typically offer slightly higher rates. Both are extremely safe.
Can I build a CD ladder in my IRA?
Yes. You can hold CDs inside a traditional IRA, Roth IRA, or SEP IRA. Brokered CDs through Fidelity, Vanguard, or Schwab IRAs work well for ladders. Keep in mind IRA early-withdrawal rules separate from CD penalties.