Peoples Offers CD Ladder Benefits

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.

Jessica 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).