CD Laddering*

Happy dad giving daughter a piggy back ride and playing football with his sons because of his Sandy Spring Bank CD.

If you want to have access to your money periodically, while receiving the highest interest rate, creating a CD (Certificate of Deposit) ladder may be a good choice.

As an example, instead of putting all of your money in a high-yielding 2-year CD, you can divide your funds into four equal parts and open four different CDs.

  • The terms for these CDs would be staggered; open a 6 month, 12 month, 18 month, and a 24 month CD. Although the 6, 12 and 18 month CDs may have a lower interest rate, the goal is to eventually get all of your money into a 2 year higher interest rate CD.
  • After 6 months, the first CD will mature and you can then renew the CD for a new 2 year CD. After 12 months, the second CD will mature and again you would renew the CD for a new 2 year CD.
  • After 18 months, the third CD will mature and again you would renew the CD for a new 2 year CD.
  • Now all of your money is in a longer-term 2 year CD, but the maturity dates for the CDs are staggered.

By using a CD ladder, all of your funds now earn the higher 2 year CD interest rate, while ensuring that a portion of your money is readily available every 6 months.

Interested in a Sandy Spring Bank CD? 

*This material is intended to serve simply as an informational or educational resource and not as investment advice.  As your needs, goals and circumstances are unique, please consult a financial professional for advice.