Grow Your Savings Smarter with CD Laddering

Looking for a simple, low-risk way to help your savings grow? Certificate laddering, also known as CD laddering, could be a great fit. 

No complicated tools or guesswork involved. It’s an easy strategy that lets you earn more on your savings while still having access to your money at regular intervals.  

First, What’s a CD?  

At a credit union like Arkansas Federal Credit Union, we call it a certificate, but it’s the same type of account most banks call a CD, or Certificate of Deposit. Different name, same great benefits.  
 
A certificate is a type of savings account where you agree to leave your money deposited for a fixed amount of time. In return, you earn a guaranteed, fixed rate. It’s a safe and steady way to grow your savings. 

Example: CD Laddering with $30,000 

Let’s say you have $30,000 to invest. Instead of locking it all into one certificate, you could break it up like this and then continually reinvest it as your CDs mature:

Term	Amount	Matures In	What Happens Next
1 year	$6,000	12 months	Renew deposit + earnings into a new CD (or withdraw funds)
2 years	$6,000	24 months	Renew deposit + earnings into a new CD (or withdraw funds)
3 years	$6,000	36 months	Renew deposit + earnings into a new CD (or withdraw funds)
4 years	$6,000	48 months	Renew deposit + earnings into a new CD (or withdraw funds)
5 years	$6,000	60 months	Renew deposit + earnings into a new CD (or withdraw funds)

If you choose to reinvest each certificate into a new term as it matures—regardless of its original length—you’ll maintain a consistent ladder with CDs maturing at staggered intervals. This means that after the initial setup period, one CD will mature at different intervals, giving you regular access to a portion of your savings while keeping the rest invested. This is just one way to set up a CD ladder. There’s no one-size-fits-all. You can tailor your ladder based on your financial goals, timeline, and the certificate terms available at the time.
 
To get started, you need at least $1,000 to open a certificate at Arkansas Federal. Also, your split does not have to be even. You can put more into longer or shorter terms if you want. Whether it’s $5,000 in a 1-year, $5,000 in a 2-year, $5,000 in a 3-year, $7,500 in a 4-year, and $7,500 in a 5-year—or any combination you choose—you’re in control.

What Happens When a CD Matures?  

When one of your CDs reaches the end of its term, you’ve got options. You can:  

• Pull the funds out and use them, or 
• Reinvest in a new CD to continue the ladder 

Need Your Money Sooner?  

Life doesn’t always stick to a schedule, and sometimes you might need to dip into your savings early. You can take money out of a certificate before it matures, but there may be a penalty for doing so. 

That is one reason laddering works so well. Because you have certificates maturing at different times, you are more likely to have access to funds when you need them without having to touch a long-term certificate. 

Why CD Laddering Works 

Here’s why people love this strategy:  

• Higher Earning Potential. Reinvesting in CDs let’s you capture some of the best fixed rates available. 
• More Flexibility. With one CD maturing frequently, you’ll never have to wait too long to access part of your savings.  
• Minimizes Risk. CDs are federally insured up to application limits, making them one of the safest places to keep your money.  
• No Market Guesswork. Laddering means you’re always reinvesting at different times, so you don’t have to try and “time” rates.  

Is CD Laddering Right for You? 

CD laddering might be a great fit if you: 

• Have savings you won’t need all at once 
• Want to earn more than a standard savings or money market account 
• Like predictable, low-risk growth 
• Don’t mind a “set it and forget it” strategy