The Benefits of CD Laddering

CD laddering is a strategy in which you open multiple certificates of deposit (CDs) that mature at different times. Each time a CD matures, you have the option to access that money or put it into a new CD.

For example, let's say you have $18,000 that you would like to put into a CD. Instead of placing all that money in one, high-yield four-year CD, you might put $4,500 into four different CDs; a four-year, a three-year, a two-year and a one-year. That way, you can have intermittent access to your money if you need it while still keeping some money in high-yield, longer-term accounts.

It’s a tactic that can potentially dilute the enticement of spending, while allowing you to put more money aside for the future. The most important thing to keep in mind in order to get the most from your CD ladder is to stay on top of when your CDs mature. When the first CD matures, you can put that money into another four-year CD, repeating the process with the others as they become due.

A CD ladder might not bring you higher returns than investments such as stocks, but CDs come with far less risk. Consider taking advantage of that security, and the ability to lock in rates, and use CDs as one of many savings tools to help bring stability to your financial life.

Florence Bank offers CDs in a wide range of terms so you can build a CD ladder that best suits your needs.  Visit our personal Checking and Savings page ( to learn more about our options today!