Fuzzy’s Financial Blog

What is a CD Ladder? No, it is not one of the shelves for compact discs. A CD Ladder is a number of CD’s (Certificate of deposits) that are spaced out over a period of time to capture better interest and provide a realitively safe investment. Generally with a CD you can get a better rate of return then if you just parked the money in a savings account, what you lose is the liquidity of a savings account. With a CD you are giving your money to the bank for a specified amount of time and earning a specified amount of interest on the money, allowing banks to lend your money. If you withdraw funds early from a CD you pay a penalty, but you can still access the money if needed.

Now with a CD ladder you are attempting to capture the higher interest rates and also maintain some liquidity of your funds. This is just another tool for your quest for income streams.