Comments on: How to Build a CD Ladder

By: Al D'Anna

Al D'Anna — Mon, 09 Feb 2009 09:43:49 +0000

I am 62 and retired since 57. I have about 600K in 5 yr cd ladder and about 300K in stock mutual funds. The whole purpose of a 5 yr CD ladder is to have required liquidity to pay living expenses while at the same time achieving the relatively high interest rate associated with 5 yr CDs compared to shorter maturities. It seems to me that breaking the 5 yr ladder because CD rates are low is a very bad idea and is a market timing attempt. Part of the reason for building the ladder in the first place is to offer protectionion from low interest rate environments. What looks low now may look not so low a year from now.

By: Anonymous

Anonymous — Fri, 31 Oct 2008 20:33:44 +0000

I know some people who use CD Laddering to be their emergency fund. They started a 6 month CD once a month for 6 months. On the 7th month their first CD matured and they reinvest the interest.. and so on. Eventually they might grow large enough to be worth much more than a months worth of expenses… at which time they could just stop reinvesting the interest earned and use it for something else.

By: Sam Kouri

Sam Kouri — Mon, 21 Jan 2008 23:14:13 +0000

I am interested in investing in CD’s.
How do i become a member of Penfed?

By: Loi Tran

Loi Tran — Wed, 25 Jan 2006 19:54:21 +0000

I think CDs are good for short term savings such as a down payment on a car or home.

I’d prefer to stick with closed end bond funds for my fix portion of my portfolio. I’ve never really been a fan of CDs also, and think there are better options out there.

By: nickel

nickel — Wed, 25 Jan 2006 19:15:03 +0000

mapgirl, it helps you maintain liquidity while at the same to letting you benefit from the (generally) higher rates of longer term CDs.

By: mapgirl

mapgirl — Wed, 25 Jan 2006 19:09:35 +0000

I have heard that since interest rates are generally on the rise, that it’s best to do this with shorter term-CD’s, like 6 or 9 month ones to take get the higher rates when offered. ING offers those and I’m trying to get something started so that I have the ladder in 1 month periods.

I suppose the converse advice is that when rates are falling, either pull out of the ladder into better yielding instruments or buy shorter terms again.

Actually, what is the point of the ladder? To always have some liquidity coming up?

By: Will Kirby

Will Kirby — Wed, 25 Jan 2006 02:48:07 +0000

I’ve never been a big fan of CD’s, but i’ve been giving them a second thought lately. Thanks for the post!

By: Geomatryx

Geomatryx — Wed, 25 Jan 2006 01:04:54 +0000

Good subject. Especially these times with yield curve inverted it’s better if the ladders are short terms. My ladder 3 months apart with 1 year maturity. My plans are to start another ladder to compliment the existing one – I will have maturity dates 45 days apart..

eg(1/1, 2/15, 4/1, 5/15,7/1, 8/15, 10/1, 11/15..)