cds

Should I ladder to beat low CD rates?

If low CD rates have you down, raise your spirits by creating a CD ladder. Rate cycles can be a burden for those looking to securely invest, especially if CD rates are low, but CD laddering allows you to benefit from the rates of short- and long-term maturities. Laddering is also useful for liquidity. If you want a no-risk investment, CD laddering may be for you.

CD laddering explained

Let's say you have $100,000 to invest and want to spread the money out over a five-year period. You select a one-year CD and invest $20,000 in the first rung, a two-year CD with $20,000 in the second rung, a three-year CD with $20,000 in the third rung and so on through the five-year period. Each year a certificate of deposit moves down a rung and matures, providing you with extra interest on an annual basis to reinvest in a new five-year CD or spend on other costs. Use Bankrate's CD laddering tool to maximize your returns and find the best CD rates.

Compare CD rates

Even when CD rates are low, some banks or credit unions offer better deals than others. It's important to compare and search out the best CDs for your ladder before diving into a plan. Be sure you're getting the best rates. Bankrate's CD comparison tool can help you find local and national CDs of all types.

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Product Rate Change Last week
1 Year CD 0.90%  0.02 0.88%
2 Year CD 1.02%  0.01 1.03%
5 Year CD 1.59%  0.01 1.60%
 
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