Short CD Ladder Example Page

Reaching Your Short Term Savings Goal with a CD Ladder

Perhaps your goal today (May 2016) is to maximize your earnings on a sum of money that you won't need for three years to fund a wedding, a college education or use as a down payment on a new house (May 2019). You could choose a 36-month CD and hope that interest rates don't rise or that you don't need access to your money, as your savings will be locked in for three years. Or, you could choose to buy and renew a 12-month CD during each of the next three years, but you would be sacrificing the higher returns usually offered with longer term CDs.

The CD Ladder offers many options to help you reach your goal. It makes saving easy and offers access to your money if you should need it prior to your goal date or to take advantage of rising interest rates. For example, Dollar Bank can open three CDs for you with terms of 12, 24 and 36 months. Each of these CDs will earn interest at its current rate, creating a blended rate that is higher than the shortest CD in your ladder. So, you start earning more on your entire balance from the very first day your CD Ladder is open.

Following is a timeline of the 3/12 CD Ladder with a Goal renewal option.

Please note: rates shown below are examples only. For our current rates, click Today's Rates on the right-hand side.

  May 2016 1.00% APY   1.50% APY   2.00% APY Bracket Blended rate*
  12 months   24 months   36 months
  Arrow   Arrow   Arrow  
May 2017 1.50% APY   Bracket Blended rate*
  24 months   Hourglass with
12 months
  Hourglass with
24 months
  Arrow   Arrow   Arrow  
May 2018   1.00% APY   Bracket Blended rate*
  Hourglass with
12 months
  12 months   Hourglass with
12 months
  Arrow   Arrow   Arrow  
May 2019    
All three CD's reach maturity.

One year after your purchase date (May 2017), your 12-month CD is maturing. We will reinvest this CD into a 24-month CD. You will benefit from an APY that is likely to be higher than the current 12-month rate at that time and this CD will mature on your goal date (May 2019). Your remaining CDs have 12 months and 24 months remaining until maturity.

After the second year (May 2018), your original 24-month CD is maturing. We will reinvest this CD into a 12-month CD. At this point, each of your three CDs has 12 months until maturity and will mature on your goal date (May 2019) so you have the money you need when you need it!
Other CD Options:
Traditional Term CD
Relationship CD
Rising Rate CD
CD Ladder
Bump-Up CD
Three Month No Penalty CD
Flex CD

*Blended Rate: This is the weighted average interest rate of each of the individual certificates in your CD Ladder for the next liquidity period. Over time, as interest earnings are credited to your individual CDs or you increase or decrease the amount of an individual CD that is renewing, the blended rate you are earning will be updated to reflect these changes. The rates and terms shown are for purposes of example only and do not reflect actual rates and terms offered by Dollar Bank. The example assumes rates remain constant, however actual rates may vary substantially over time.
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