The Ultimate Certificate Strategy

Laddering your certificates is an excellent way to ensure you earn the best rates possible. It allows you to control the terms while getting the liquid availability you want. For example, instead of opening one 5-year certificate for $25,000, open five certificates for $5,000 each for the following terms:

  • 12 months
  • 24 months
  • 3 years
  • 4 years
  • 5 years

As each certificate matures, you can either use the funds you need or renew into another 5-year term
like in the example below.

Certificate Term and Maturity Date Information

Original Term Original Maturity Date Renew into Next Maturity Date
12 Month 5-Year
24 Month 5-Year
3 Year 5-Year
4 Year 5-Year
5 Year 5-Year

So why ladder? Referring to the example above, 20% (or $5,000) of your original $25,000 certificate (plus the accrued dividends for that certificate) is made available to you each year. By renewing each maturing certificate into a 5-year certificate, you'll be earning a higher rate than if you'd simply continued with another 12- or 24-month certificate (laddering isn't limited to the 12-month through 5-year example above). The strategy works to your advantage because after a few of your certificates mature and are renewed into another 5-year certificate, you'll be earning the highest rate and have a 5-year certificate maturing every year.

The same idea can be applied to shorter- and longer-term examples. It's really up to you how you want to save and use your funds. Laddering can provide you with a more steady and stable source of savings than a single-certificate investment. The best part is, you can always add funds to your certificate at maturity and watch your savings grow.

Certificate Laddering Calculator


Savings as high as+ 0.70% APY

Auto Loans as low as+ 1.79% APR

Certificates as high as 3.50% APY

Credit Cards as low as++ 5.99% APR

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