A CD LADDER CAN ALLOW YOU TO EARN A HIGHER RETURN …
A CD LADDER CAN ALLOW YOU TO EARN A HIGHER RETURN AND STILL HAVE ACCESS TO SOME OF YOUR FUNDS EVERY 12 MONTHS WITH NO PENALTY. HERE'S HOW:
36-Month CD
36-Month CD
(24 months remain)
New 36-Month
CD
36-Month CD
(12 months remain)
36-Month CD
(24 months remain)
New 36-Month
CD
YEAR
1
YEAR
2
YEAR
3
24-Month CD
24-Month CD
(12 months remain)
Maturing 24-Month
CD
12-Month CD
Maturing 12-Month
CD
First Maturity
Period
Second Maturity
Period
Third Maturity
Period
YEAR
1
Roll Over Maturing CD to 36-Month
Roll Over Maturing CD to 36-Month
Let's assume you have $6,000 to deposit in CDs. Divide the funds equally and open a 12-Month CD, a 24-Month CD and a 36-Month CD.
Keep in mind that this is only an example. Your strategy can encompass as many years as you need.
YEAR
2
When your original 12-Month CD matures, convert its funds into a new, higher return 36-Month CD. When your original 24-Month CD matures, convert its funds into a new 36-Month CD also.
Maximize your earnings by converting maturing CDs to the longest-term CD in your ladder.
YEAR
3
At this point, the term of all three of your CDs will be 36 months. However, you will have a CD maturing every year. That means you'll have penalty-free access to a portion of your funds every 12 months.
By putting these CDs on automatic renewal, the process will continue for as long as you want it to.
Synchrony Bank does not provide financial advice. Please consult your professional advisors before opening any account. A penalty may be imposed for early withdrawals. Fees may reduce earnings.
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