Peoples Offers CD Ladder Benefits

How You Can Ladder Your Certificates of Deposit for Ease of Access and to Build Your Savings

A Certificate of Deposit (CD) ladder is a saving strategy that helps you spread your savings across varying lengths of certificate of deposit accounts. The plan provides access to your money through short-term accounts offering lower interest rates, while higher interest rates are provided in long-term CD accounts. This contrasts with putting all your money into one long-term CD, which will tie up the money until the CD matures.

With recent rate changes, Peoples CD offerings provide an excellent opportunity to use a CD ladder to your benefit. With long-term CD accounts, your money earns a higher interest rate, but your money is tied up with the term of the CD, typically in the 24-month or higher term. Using a ladder savings strategy, savers put portions of their money into long-term CDs to earn the premium interest rate. At the same time, they put a portion of their money into short-term CDs, where they earn a lower interest rate but have more access to their money.

The tactic lets you benefit from long-term CDs’ higher interest rates and short-term CDs’ frequent access to funds. Consider a CD ladder strategy if you want to take pressure off of trying to open CDs based on when rates rise or fall.

Putting portions of your money into varying-length CDs can be built how you want. Some people put equal amounts of money into four or five varying-length CDs. The flexibility comes into play after each CD matures. It helps to reinvest your short-term CDs when they mature. Unless, of course, you need the money for a purchase or other expenses.

photo of Jessica BrownJessica Barnes
Chief Financial Officer
Jessica is responsible for all financial aspects of Peoples State Bank, with more than 25 years of experience as a certified public accountant (CPA). 

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