CD Laddering: How it Works, and How It Can Maximize Your Savings

Some financial experts, including Rob Bennett of A Rich Life, believe that CDs are some of the best savings options out there. Some CDs earn you higher interest on your money than other types of savings accounts, and many of them come insured by the FDIC to the maximum amount allowed by law.

Ally Bank’s CDs come at consistently competitive rates. And you can further maximize your savings by creating a CD ladder. CD laddering lets you enjoy both the higher rates attached to longer term CDs, while still benefiting from the more frequent access to your funds that comes with shorter term CDs.

To get started with building a CD ladder, first decide how much money you want in your CD ladder. Then divide that money among several CDs that mature at regular intervals (e.g., one 1-year CD, one 2-year CD, one 3-year CD, and so on).

Once your first CD matures, you can access that money. Because you have other CDs set to mature at regular intervals, you’ll never go long without having access to the rest of your high-interest savings.

Or you could continue rolling your money as it matures into CDs with longer terms, which gives you access to higher interest rates but still grants you regular access to your money. This advantage makes CD laddering a popular way to save for retirement, especially if you use IRA CDs like the ones offered by Ally.

We have a new tool on that helps you estimate the savings created by your CD ladder by guiding you through the projected timeline of your ladder and giving step-by-step instructions for when you need to take action.

And if you ever have questions about your accounts, you can always reach a live customer representative when you call 1-877-247-ALLY (2559).

Do you use a CD ladder to help with your savings goals? What other tools do you use to make the most of your savings?

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