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Reply to "Keeping cash in a CD ladder"
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[quote=Anonymous][quote=Anonymous][quote=Anonymous]Anyone care to explain this laddering concept?[/quote] You divide your money into five buckets and put one bucket on a one-year CD, one in a two-year CD, one in a three-year, etc. so that as each CD matures, you can roll that money forward to a new five-year CD. Then you keep doing this continuously so that you have access to your money if needed but in theory it's getting higher interest rates than it would be sitting in a savings account. (That has only sometimes been true in the time we've had a CD ladder, but probably true on balance.) I will say that we skipped the one- and two-year CDs when we started ours because the rates were so miserable for those, and put most of it in 3-, 4- and 5-year CDs. We have backfilled when there are occasional special rates on shorter-term CDs so now we are pretty close to having it evenly divided, though. [/quote] Thanks![/quote]
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