CD Ladder Calculator

Enter your amount and the CD rates your bank actually quotes. You'll get the ladder's blended APY, a ten-year comparison against going all long or staying short, and a year-by-year table showing the rung that matures every single year.

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Long-term rates with short-term access

The CD buyer's dilemma is a straight trade: long CDs pay the best rates but lock your money for years; short CDs keep you liquid but pay less. A ladder refuses the choice. Split the money into equal rungs across 1-year through 5-year CDs, and every year one rung matures. Each maturing rung rolls into a new 5-year CD, because that is the best rate on the menu, and here is the elegant part: after the first few years, every dollar earns the 5-year rate, yet one rung still matures every single year, forever.

This calculator builds the ladder from your actual quoted rates, then runs the ten-year race against the two pure strategies: all-in on long CDs (best yield, worst access) and rolling 1-year CDs (best access, worst yield). The result is usually striking: the ladder captures most of the long-CD yield while never leaving you more than twelve months from penalty-free money.

The formula

Rung k: (Amount ÷ Rungs) grows at ratek for k years, then rolls into R-year CDs at rateR
APY compounds annually by definition; today's rates are held constant (stated assumption)

The blended starting APY is the simple average of the rung rates. Because APY already includes compounding, annual compounding at the quoted APY reproduces each CD's actual growth exactly.

Worked example

$50,000 in five rungs of $10,000, at quoted APYs of 4.0 / 4.1 / 4.2 / 4.3 / 4.5% for 1 through 5 years: a blended starting APY of 4.22%.

Ten years at those rates: the ladder reaches $77,203.59, against $77,648.47 for going all-in on 5-year CDs and $74,012.21 for rolling 1-year CDs. The ladder captures 87.8% of the extra yield the long strategy offers, and its total cost against all-in-long is $444.88 over a decade. What that money buys: a maturing rung every year, starting at $10,400 in year one and growing to $15,529.69 by year ten, always at most twelve months away.

What the flat-rate assumption hides, and why ladders like it either way

The projection holds today's rates still for ten years, which is the honest way to compare structures but not how the world works. The useful insight is that a ladder is built for that uncertainty: because one rung reprices every year, you are never betting the whole sum on one day's rate. If rates rise, next year's roll catches them; if they fall, four fifths of the ladder is still locked at the old, better rates. All-in strategies make that bet once, with everything.

Practical fine print worth knowing before you build one. Early-withdrawal penalties on bank CDs typically run three to twelve months of interest, which is exactly the cost the ladder's annual maturities let you avoid. FDIC insurance covers $250,000 per depositor per bank, so large ladders often spread rungs across institutions, which also lets each rung shop for the best rate. Brokered CDs (bought through a brokerage) can be sold instead of redeemed, but at market price, which can mean a loss when rates have risen. And a ladder is for money with a timetable, not for the emergency fund: cash you might need on a Tuesday belongs in savings, and the first rung of your ladder is not it.

Your next step: where ladders actually get built

Two honest ways in. The direct route is CDs from an FDIC-insured online bank, opened one rung at a time; the same names that lead the savings-rate tables, such as Ally, Capital One 360 and CIT Bank, run CD shelves too. The convenient route is brokered CDs inside a brokerage account at Fidelity or Schwab, where one screen shows hundreds of banks' CDs at once and a whole ladder can be bought in a sitting; the trade is that brokered CDs are sold rather than redeemed if you exit early, which can return more or less than a bank's fixed penalty. Named as vocabulary, not a ranking, and we have no affiliate relationship with anyone on this page and earn nothing if you open an account anywhere; if that ever changes, this sentence will change with it, in plain sight.

Frequently asked questions

What is a CD ladder?

A way to split money across CDs of staggered maturities, classically one through five years, so one CD matures every year. Each maturing rung rolls into a new long CD at the best rate, and after the first few years every dollar earns the long rate while a rung still matures annually: long-term yield with short-term access.

How much better is a ladder than just picking one CD?

It is not better in pure yield; it is better in shape. In this page's example the ladder gives up $444.88 over ten years against going all-in on 5-year CDs, while capturing 87.8% of the extra yield over staying short, and in exchange a five-figure rung matures every year. The comparison table prices that trade with your own rates.

How many rungs should a CD ladder have?

Five one-year steps is the classic because it matches the usual best-rate term, but three or four rungs work the same way with shorter lockups and slightly lower blended yield. More rungs mean smoother access and more accounts to manage; the calculator lets you compare all three shapes.

What happens when a CD in the ladder matures?

You choose: spend it, or roll it into a new long CD at whatever rates are then on offer. The rolling is what keeps the ladder alive, and it is also the rate-averaging feature: you reprice one fifth of your money every year instead of betting the whole sum on a single day's rate.

What if interest rates change after I build the ladder?

The ladder is built for exactly that. If rates rise, next year's maturing rung catches the new rates; if they fall, the rest of the ladder stays locked at the old, better ones. The flat-rate assumption in the projection is for fair comparison, not a forecast, and the ladder is the strategy least exposed to it being wrong.

What are CD early-withdrawal penalties?

Typically three to twelve months of interest, depending on the bank and term, and they are the cost the ladder's annual maturities exist to avoid. If there is a real chance you need a rung's money before it matures, that rung probably belongs in a high-yield savings account instead.

Is a CD ladder FDIC insured?

Each bank CD is, up to $250,000 per depositor per bank per ownership category. Ladders above that level usually spread rungs across banks, which keeps every dollar insured and lets each rung shop for the best rate, since no single bank quotes the best rate at every term.

Should my emergency fund go in a CD ladder?

No. A ladder is for money with a timetable: known expenses, retirement income buckets, a house fund with a date. Emergencies do not wait for maturities, and paying an early-withdrawal penalty to fix a water heater defeats the whole structure. Keep the emergency fund in savings and ladder what is left.

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