CD Ladder Calculator

A ladder keeps money accessible while capturing longer-term CD rates.

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Your ladder

Blended APY
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Splits your money evenly across rungs maturing 1…N years out, with rates interpolated between the short and long rate. Illustrative.
About this calculator

How to build a CD ladder

Updated October 2026

A CD ladder splits your savings across certificates of deposit that mature at different times, usually one each year. You get a blend of short- and long-term rates, and part of your money becomes available every year without paying an early-withdrawal penalty. With the defaults, $25,000 split into five $5,000 CDs maturing in one to five years, at rates from 4.8% to 4.0%, earns a blended 4.40% and about $1,100 in the first year.

How a ladder works

  1. Divide your money evenly across CDs of different lengths, for example 1, 2, 3, 4 and 5 years.
  2. When the 1-year CD matures, reinvest it in a new 5-year CD.
  3. Repeat every year. After the first cycle, every CD is a 5-year CD earning long-term rates, yet one matures every year.

Using the default rates, here is the starting ladder:

RungAmountRate
1 year$5,0004.80%
2 years$5,0004.60%
3 years$5,0004.40%
4 years$5,0004.20%
5 years$5,0004.00%

The defaults show short-term CDs paying more than long-term ones, which happens when banks expect rates to fall. Enter the rates your bank or credit union is actually offering; when long-term CDs pay more, the ladder's advantage over a single short CD grows.

Why build a ladder instead of one CD

  • Access: part of your money comes free every year, so you are less likely to break a CD early and pay a penalty, which is often several months of interest.
  • Rate risk: if rates rise, you reinvest the maturing rung at the higher rate. If they fall, the longer rungs keep earning the old rate.
  • No guessing: you never have to bet everything on where rates will go.

Ladder variations

  • Short ladder: 3-, 6-, 9- and 12-month CDs for money you may need within a year, such as an emergency fund overflow.
  • Barbell: half in very short CDs, half in long ones, skipping the middle.
  • Bullet: several CDs that all mature around one date, for a known expense like a down payment.

Things to check

  • Insurance: FDIC (banks) and NCUA (credit unions) insure deposits up to $250,000 per depositor, per institution, per ownership category.
  • Early-withdrawal penalties differ widely between banks; compare them along with the rate.
  • Taxes: CD interest is taxed as ordinary income each year, even if you don't withdraw it. Holding CDs in an IRA avoids that.
  • Brokered CDs from a brokerage can be sold before maturity instead of paying a penalty, but their market price can fall if rates rise.

See what a single CD earns with the CD calculator, or compare a CD with a high-yield savings account in our savings vs CD guide. Credit union members can use the share certificate ladder calculator.

Frequently asked questions

What is a CD ladder?

A set of CDs with staggered maturity dates, typically one maturing each year. It gives you regular access to part of your money while earning longer-term rates on the rest.

How many rungs should a CD ladder have?

Five rungs, one to five years, is the classic setup. Fewer, shorter rungs suit money you might need soon.

Is a CD ladder better than a high-yield savings account?

A ladder locks in rates and protects you if rates fall, but your money is less accessible. A savings account is fully liquid but its rate can drop at any time. Many people keep an emergency fund in savings and use a ladder for money they won't need for a while.

What happens when a CD in the ladder matures?

You can withdraw it or reinvest it, usually in a new CD at the longest rung, to keep the ladder going.

Are CDs safe?

CDs at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per depositor, per institution, per ownership category.

The blended yield is the simple average of the rung rates; rates between the 1- and 5-year rates are interpolated. Use the rates your institution offers. Insurance limits from the FDIC and NCUA.

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