CD Ladder Calculator
Ladder setup
Advanced options
Enter a deposit to build your ladder
Add a total amount to invest and we'll split it across staggered CDs.
Know what this estimate is based on
- Jurisdiction
- Interest arithmetic, which no statute governs; the deposit-insurance limits and the national rate context around it are federal and U.S.-only
- Rules and time period
- APYs and balances are the ones you enter, not live offers. FDIC and NCUA coverage limits and the FDIC national rate caps change independently of this page.
- Scope and limitations
- Projection only. Actual APY, posting dates, compounding method, minimum balances, withdrawal rules, penalties, fees and tax on the interest depend on the institution and your account agreement.
- Source links checked
- Sep 19, 2026
Built and regression-tested by Smart Tools Lab. It has not been individually reviewed by a licensed financial, tax, or legal professional.
How to use
- 01
Enter the total amount you want to invest — say $100,000 — which the calculator splits equally across the rungs, so five rungs each hold $20,000.
- 02
Choose how many rungs to build and the spacing between maturities. With five rungs and one-year spacing, the terms run from a one-year CD up to a five-year CD, one maturing each year.
- 03
Set the yield for each rung. Longer CDs usually pay more, so a typical curve climbs from 4% on the one-year rung to 5% on the five-year; press Even curve to auto-fill a rising ladder, or switch to APR and pick a compounding frequency if your bank quotes a nominal rate.
- 04
Decide what happens at each maturity: reinvest the proceeds into a fresh longest-term CD to keep the ladder rolling, or hold every rung to maturity and take the cash. When reinvesting, set how many years to project — ten in the worked example below.
- 05
Open advanced options to add a marginal tax rate on interest, an inflation rate for the today's-money view, and a rate shift applied to reinvested CDs so you can test a rising or falling rate environment.
- 06
Read the ladder's value at the horizon, the total interest, the weighted-average and realized yields, the maturity schedule with each rollover, and how the ladder stacks up against a single long CD and a rolling short CD.
Formula
The deposit is divided equally among the rungs, so each rung starts with the deposit divided by the number of rungs. Rung number i is given a term of i spacing intervals and its own yield. That yield is turned into an effective annual rate: an APY is already effective, while an APR is compounded the chosen number of times a year, one plus the nominal rate over the frequency, raised to the frequency, minus one. A rung left to its own maturity grows to its principal times one plus the effective rate, raised to the term in years, and the interest is that maturity value minus the principal. The calculator then runs the whole ladder forward on a grid of maturity dates. Whenever a CD matures it pays principal plus interest; if reinvestment is on, those proceeds open a new CD at the longest term and the top rung's rate (optionally shifted for a changed rate environment), so the ladder reaches a steady state where one CD comes due every interval. If reinvestment is off, the proceeds are simply held as cash. The value at the end of the horizon marks every CD still open to its accrued worth — principal times one plus its rate, raised to the years elapsed — and adds any cash from matured rungs. Total interest is that ending value minus the original deposit. The weighted-average APY is the deposit-weighted mean of the rung yields, which for equal rungs is their simple average; the realized yield is the compound annual growth of the whole ladder, the ending value over the deposit raised to one over the horizon, minus one. Tax is the marginal rate applied to total interest, assumed paid from outside the ladder so it never slows the compounding, and the real value discounts the ending figure by inflation over the horizon. Two single-CD benchmarks value the entire deposit over the same horizon: a long CD at the top rung's rate and a rolling short CD at the shortest rung's rate.
Example
Say you have $100,000 to invest and split it into five equal rungs of $20,000 each. With one-year spacing the rungs run one through five years, and the yields climb along a gentle curve — 4% on the one-year, 4.25%, 4.5%, 4.75% and 5% on the five-year — averaging 4.5%. Each rung grows to its own maturity value: the one-year $20,000 reaches $20,800, the two-year $21,736, the three-year $22,823, the four-year $24,079 and the five-year $25,526. Because reinvestment is switched on, every rung that comes due rolls into a fresh five-year CD at the 5% top rate, and the ladder keeps rolling across a ten-year horizon. Marking every certificate at year ten — reinvested cash back at work, still-open CDs at their accrued value — the ladder is worth about $161,343, of which $61,343 is interest. That is a realized yield of roughly 4.9% a year, higher than the 4.5% average rung rate because every reinvested rung earns the 5% top rate for its whole life, pulling the blend upward. Now the comparison over the same ten years. Lock the whole $100,000 in a single 5% CD and keep rolling it, and you would hold about $162,889 — just $1,546 more — but with nothing accessible until year five. Roll it all instead in one-year 4% CDs and you would have full annual access but only about $148,024. The ladder lands between the two: it earns about $13,319 more than the rolling short CD while handing you the same yearly access, capturing close to 90% of the long CD's yield advantage. With inflation set to 3%, the $161,343 is worth about $120,054 in today's money. Every number is an estimate that holds the rates steady for the full horizon; the rates you actually reinvest at years from now will differ.
Definitions
- CD ladder
- A set of certificates of deposit bought at once but with staggered terms, so one matures on a regular cadence. It blends the higher yields of longer CDs with the regular access of shorter ones. The worked example above splits $100,000 across five rungs maturing a year apart.
- Rung
- One CD within the ladder. Each rung holds an equal share of the deposit — $20,000 of the $100,000 here — and carries its own term and yield, with rung one the shortest and rung five the longest.
- Maturity spacing
- The gap between successive maturities, one year in the default. It sets both the terms — rung i matures after i intervals — and how often a slice of cash frees up, so tighter spacing means more frequent access.
- Term
- How long a CD is locked before it matures. In the example ladder above the terms run one, two, three, four and five years; a longer term usually earns a higher rate but ties the money up for longer.
- APY (annual percentage yield)
- The effective yearly rate on a CD once its own compounding is counted, and the figure banks advertise. Enter it directly, or switch to APR and give a compounding frequency and the tool converts it for you.
- Weighted-average APY
- The deposit-weighted mean of the rungs' yields, which for equal rungs is just their average — 4.5% in the example above. It describes the blend of rates you hold, not the growth the ladder actually realizes.
- Realized yield
- The compound annual growth of the whole ladder over the horizon — about 4.9% in the example above. It can beat the weighted-average APY when maturing rungs reinvest at the higher top rate.
- Reinvestment (rollover)
- Rolling a maturing rung's proceeds into a new longest-term CD instead of taking the cash. It keeps the ladder at full length and pushes the realized yield up, at the cost of putting the money back to work rather than spending it.
- Reinvestment-rate risk
- The chance that rates have fallen by the time a rung matures, so its proceeds roll into a lower-yielding CD. The advanced rate-shift input lets you model a higher or lower reinvestment environment.
- Liquidity
- How readily you can reach your cash without breaking a CD early. A ladder's liquidity comes from its steady stream of maturities — one rung a year here — rather than from cashing out mid-term and paying a penalty.
- Rolling short CD
- A benchmark that puts the entire deposit in the shortest-term CD and rolls it over each interval. It offers the most access but the lowest yield; the example's rolling one-year 4% CD reaches about $148,024 over ten years.
- Single long CD
- A benchmark that keeps the whole deposit at the top rate for the entire horizon, rolling it over as it matures. It earns the most — about $162,889 across the example's ten years — but leaves nothing accessible along the way, the opposite trade-off to the short CD.
Good to know
How a CD ladder works: staggered terms that trade lock-up for access
A certificate of deposit pays a fixed rate in return for locking your money away for a set term, and normally you face a choice: reach for the higher rate on a long CD and lose access to your cash, or stay liquid in a short CD and accept a lower yield. A ladder refuses to pick one. It splits a single deposit across several CDs of different lengths, so that instead of one maturity date far in the future you have a steady drumbeat of them. Say $100,000 is divided into five equal rungs of $20,000. The first is a one-year CD, the next a two-year, on up to a five-year, so a rung comes due every twelve months. That staggering is the whole idea. Once the ladder is a few years old, a chunk of your savings is always within a year of maturing, giving you regular chances to spend the cash, move it, or roll it forward — without ever breaking a CD early and swallowing a penalty. Meanwhile the money you are not about to need sits in the longer rungs, earning the fatter rates that reward patience. The calculator builds this structure for you: enter the deposit, the number of rungs and the spacing, and it lays out each rung's term, rate and maturity value. What you see is a portfolio that behaves less like a single locked deposit and more like a slow, dependable conveyor belt of cash, engineered so that liquidity and yield stop being an either-or.
Turning a quoted rate into growth: APY, APR and compounding
Banks advertise CDs with an annual percentage yield, or APY, and that is the figure this calculator expects by default. The APY already folds in how often the CD compounds, which is what makes it the honest number for comparing offers: a 4.9% APY is 4.9% of growth in a year, full stop, whatever the compounding schedule underneath. Enter it against a rung and the maturity value follows directly — principal times one plus the APY, raised to the term in years. So a one-year rung at 4% turns $20,000 into $20,800, and a five-year rung at 5% grows $20,000 into $25,526 by the time it matures. Some institutions instead quote a nominal rate, or APR, alongside a compounding frequency, and the tool handles that too. Switch the rate type to APR and choose daily, monthly, quarterly or annual compounding, and it converts the nominal figure to an effective one using the standard formula: one plus the nominal rate divided by the frequency, raised to the frequency, minus one. The more often a nominal rate compounds, the higher its effective yield, which is precisely why a 4.8% rate compounded daily can out-earn a 4.85% rate compounded annually. Getting this distinction right matters when you are comparing rungs or shopping across banks, because a rate is only meaningful once you know whether it is nominal or effective. Whenever you are unsure, entering the APY sidesteps the ambiguity entirely, since it is already the number that governs how much each rung will actually be worth at maturity.
Reinvestment and the steady-state ladder
A ladder only reaches its full potential when you keep it running. Each time a rung matures you face the same decision the calculator's reinvestment setting captures: take the cash, or roll it into a new CD. Roll it, and the natural move is into a fresh CD at the longest term, because the rungs below it are already covering your nearer-term needs. Do that every year and the ladder settles into a steady state: a new longest CD opens each interval just as an old one comes due, so you permanently hold the full spread of terms and keep earning the top rate on the money you roll. In the worked example above, reinvestment is on and the tool projects the ladder for ten years. Every maturing rung — starting with the one-year rung at the end of year one — rolls into a new five-year CD at the 5% top rate, and then those reinvested CDs mature and roll again. By year ten the $100,000 has grown to about $161,343. Turn reinvestment off and the character of the tool changes: it stops projecting a rolling strategy and instead simply holds each original rung to maturity, reporting the cash you collect as each comes due. The horizon then pins itself to the longest rung, since nothing happens after the last CD matures, and that five-rung ladder totals about $114,965 once every rung has paid out. Reinvestment is therefore the difference between a ladder as a living, self-renewing structure and a ladder as a one-time, hold-to-maturity plan — and the calculator lets you see both at the flip of a switch.
Two yields, and why they disagree
The calculator reports two headline rates, and understanding why they differ is the key to reading a ladder correctly. The first is the weighted-average APY: the deposit-weighted mean of the rates across your rungs. Because the ladder splits the money equally, this is just the simple average of 4%, 4.25%, 4.5%, 4.75% and 5% — a tidy 4.5%. It tells you the blend of rates you are holding at the outset, and nothing more. The second is the realized yield, the compound annual growth the whole ladder actually delivers over the horizon, worked out as the ending value divided by the deposit, raised to one over the number of years, minus one. In the example above that comes to about 4.9% — noticeably above the 4.5% average. The gap is entirely down to reinvestment. When the low-rate one-year rung matures, its money does not keep earning 4%; it rolls into a five-year CD at 5%, and the same happens to every short rung as it comes due. Over ten years, more and more of the ladder ends up earning the top rate, so the growth the portfolio realizes outruns the average rate it started with. This is why quoting only the average APY understates a rolling ladder, and why the realized yield is the figure to watch when you care about actual growth. With an inverted curve, where short rungs pay more than long ones, the relationship flips and reinvesting into the lower long rate can drag the realized yield below the average. The two numbers are not redundant: one describes the mix you hold, the other the growth you get.
Ladder versus a single CD: the yield-liquidity spectrum
To judge whether a ladder is worth the effort, you need something to compare it against, so the calculator values two single-CD strategies over the very same horizon. At one extreme is a single long CD: the whole deposit locked at the top rung's rate for the full term. This is the yield-maximizer — in the example above it grows the $100,000 to about $162,889 over ten years, the highest of any option — but it is also the least liquid, with nothing accessible until it matures. At the other extreme is a rolling short CD: the entire deposit kept in the shortest term and rolled over each interval. This is the liquidity-maximizer, giving you access every year, but it earns the least, reaching only about $148,024. The ladder occupies the ground between them, and the numbers make its appeal concrete. It ends at about $161,343 — within $1,546 of the fully locked long CD, yet with the same yearly access as the rolling short CD, which it out-earns by roughly $13,319. The tool distills this into a single percentage: the share of the long CD's yield premium the ladder captures, close to 90% in that example. That framing is the honest way to think about a ladder. You are not trying to beat the best possible yield or the best possible liquidity; you are trying to give up as little yield as possible in exchange for meaningful access. A ladder that captures most of the premium while restoring regular liquidity is doing exactly the job it was designed for, and the comparison bars show at a glance whether your particular setup achieves that.
The rate curve, editable rungs and reinvestment-rate risk
The shape of the rates across your rungs — the yield curve — drives much of the ladder's behavior, and the calculator lets you set it however the market and your bank dictate. Normally the curve slopes upward, because locking money away longer earns a premium; the curve in the example above rises a quarter-point per rung, from 4% to 5%. The Even curve button fills exactly this kind of gently rising ladder from your shortest rung, as a convenient starting point. But every rung is independently editable, so you can flatten the curve when all terms pay alike, invert it when unusual conditions push short rates above long ones, or drop in the specific promotional rate a bank is offering on one particular term. Entering the real rates you have been quoted always beats relying on a stylized curve. The curve also frames the ladder's central hazard: reinvestment-rate risk. When you build the ladder you know today's rates, but you cannot know the rate a rung will roll into when it matures years from now. If rates have fallen, your maturing cash reinvests at a lower yield than the CD it replaces, and the realized yield slips. A ladder cushions this because only one rung rolls at a time, spreading your reinvestment across many different rate environments rather than betting everything on one. To let you stress-test it, the advanced rate-shift control applies a rise or fall to every reinvested CD, so you can watch how the ten-year projection responds if rates drift down after you build the ladder — or reward you if they climb.
Taxes and inflation: what the ladder really keeps
A CD ladder's headline growth is a before-costs figure, and two forces decide how much of it you actually keep. The first is tax. Interest on an ordinary CD is taxable in the year it is earned and reported to the tax authorities, even if you leave it to compound and never touch it — there is no deferral on a standard, taxable CD. The calculator assumes you pay that tax from money outside the ladder, so it never eats into the compounding itself; instead it shows the tax as a separate line and an after-tax value. Enter your marginal rate and you can see how much of the interest the tax collector takes. Placed inside a tax-sheltered account like an IRA CD, that annual charge does not apply, which is why the setting defaults to zero. The second force is inflation, and it works differently from tax. Inflation leaves the nominal ending value untouched — the ladder is still worth about $161,343 in future dollars — but it erodes what that sum can buy. Discounting by 3% a year over the ten-year horizon, the tool restates the balance as about $120,054 in today's money. This matters especially for CDs, because their yields often sit close to the prevailing inflation rate, which means the real, inflation-adjusted return on even a well-built ladder can be slim. Reading the ending value in today's money, alongside the after-tax figure, is the only way to know whether the ladder is genuinely lifting what your money can buy or merely treading water against a rising cost of living. The nominal number alone can flatter a plan that, in real terms, is barely holding its ground.
Common CD-ladder mistakes
Several recurring missteps blunt an otherwise sensible ladder, and the calculator brings each into view. The first is judging the ladder by its average rate. The 4.5% weighted-average APY understates a rolling ladder whose realized yield is nearer 4.9%, so leaning on the average alone sells the strategy short. The opposite error is assuming the realized yield is locked in: it depends on reinvesting at today's rates, and if rates fall, later rungs roll into lower yields than the projection shows. A second mistake is over-reaching for yield by making the ladder too long. A single long CD does earn the most on paper, but it surrenders the very liquidity the ladder exists to provide; stretching every rung out until cash is rarely accessible quietly rebuilds the problem you were trying to solve. Third is ignoring taxes on a taxable CD. Because interest is taxed every year as it accrues, a ladder held in a plain brokerage or bank account keeps less than its headline suggests, and treating the pre-tax figure as spendable overstates the plan. Fourth, and most common, is forgetting inflation. A projected $161,343 feels like solid growth until you notice it is worth about $120,054 in today's money, and that CD yields frequently only track rising prices rather than outpacing them. Fifth is misreading liquidity: a ladder gives you access at each maturity, not on demand, so counting on cash between maturity dates still means breaking a CD and paying a penalty. Finally, some savers build a ladder once and let it lapse, taking every maturity as cash; that is a legitimate choice, but it forfeits the compounding a rolling ladder provides. None of these is fatal, and each is easy to check by adjusting an input and watching the result move.
Building a ladder in practice, and the limits of this estimate
Turning the projection into a real ladder is straightforward, but a few practical choices shape the outcome. Decide first how much regular access you want, because that sets the spacing: annual maturities suit most savers, while tighter spacing buys more frequent liquidity at the cost of leaning on shorter, lower-yielding terms. Next choose the number of rungs — more rungs smooth the cash flow and lengthen the top term, but spread the deposit thinner, which can bump against a bank's minimum deposit per CD. Then shop the actual rates for each term, since a promotional CD on one particular length can reshape the whole curve, and enter those real figures rather than a generic rising slope. Finally, decide up front whether you intend to roll maturities or spend them, because that choice, more than any other, determines how the ladder grows. The calculator is built to compare these decisions: save a setup, change one lever, and line the versions up side by side. What it deliberately does not model is as important as what it does. It assumes equal rungs, no early withdrawals, taxes paid from outside the ladder, and — crucially — that you can reinvest at the rates shown, when in reality future rates are unknown and will differ. It leaves out bank-specific minimums, callable and promotional CDs, deposit-insurance limits, and the penalties for breaking a CD early, all of which belong to the real world beyond a steady-rate model. Read the output as a directional estimate that clarifies the yield-versus-liquidity trade-off, not as a prediction of a precise balance. Nothing here is financial or tax advice; confirm current rates and terms with your bank, and for a large or long commitment, with a qualified professional who can weigh the details this model keeps simple.
Frequently asked questions
What is a CD ladder, and how does this calculator model one?
A CD ladder splits a lump sum across several certificates of deposit with staggered terms, so one matures on a regular schedule while the rest keep earning longer-term yields. This tool divides your deposit equally into the number of rungs you pick, gives rung one the shortest term and rung five the longest, and grows each at the yield you set. It then steps the whole ladder forward date by date, maturing each rung in turn. The worked example above splits $100,000 into five one-to-five-year rungs and, reinvesting for ten years, projects a value of about $161,343.
Why build a ladder instead of putting everything in one CD?
It is a deliberate compromise between yield and access. One long CD pays the most but locks every dollar away until it matures; one short CD keeps you liquid but earns the least. A ladder sits between them, capturing much of the long-term yield while still freeing a slice of cash on a regular cadence. In the example above, the ladder earns about $13,319 more than rolling a one-year CD — with the same yearly access — and gives up only about $1,546 versus locking it all in a five-year CD, capturing close to 90% of that CD's yield advantage.
What does the reinvestment setting do, and what if I turn it off?
With reinvestment on, each rung that matures rolls its full proceeds into a new longest-term CD at the top rung's rate, so the ladder stays at full length and reaches a steady state of one maturity per interval. The projection then runs for the number of years you choose — ten in the example above. Turn reinvestment off and the tool instead holds every rung to its own maturity and reports the cash you collect as each comes due; the horizon is pinned to the longest rung's term, so that five-rung ladder totals about $114,965 once all five have matured.
Why does the realized yield differ from the weighted-average APY?
They measure two different things. The weighted-average APY is simply the deposit-weighted average of the rates you hold across the rungs — 4.5% in the example above. The realized yield is the compound annual growth the whole ladder actually achieves over the horizon, about 4.9% here. Reinvestment is what separates them: as the lower-rate short rungs mature, their money rolls into new CDs at the higher 5% top rate, so over ten years the ladder grows faster than its starting average rate would suggest. Turn reinvestment off and the gap widens the other way — the calculator holds every rung to its own maturity and the cash from earlier rungs then sits idle rather than compounding, so the realized yield falls to roughly 2.8% a year, further below the unchanged 4.5% average.
How does the ladder compare with a single long CD or a rolling short CD?
The calculator values all three over the same horizon so the trade-off is explicit. The single long CD locks the whole deposit at the top rate — the highest ending value, about $162,889 in the example above, but no access until year five. The rolling short CD keeps everything in the shortest term and rolls it each year — full annual access, but the lowest value, about $148,024. The ladder lands between, and a single figure sums it up: it captures roughly 90% of the long CD's yield premium while matching the short CD's yearly liquidity.
Do I have to use the rising rate curve, or can I set each rung myself?
Each rung's yield is fully editable — type whatever your bank offers on that term, including a flat curve where every rung pays the same or an inverted one where short CDs pay more than long. The Even curve button is only a convenience: it fills a gently rising ladder from your shortest rung's rate as a realistic starting point. Because real CD offers vary by bank and promotion, entering the actual rates you have been quoted gives the most accurate projection.