Quick Answer — Building a CD Ladder
To build a CD ladder, split your cash into equal parts and open CDs with staggered terms (commonly 1 to 5 years), then reinvest each CD into a new long-term one as it matures. In June 2026, the best CD APYs ran about 4.00%–4.20% (Bankrate, NerdWallet), so a 5-rung ladder locks in those rates while freeing up one rung every year.
1–5 yr
Typical rungs
~4.0–4.2%
Top APY (6/2026)
$250k
FDIC limit / bank
1 / yr
Rungs that free up
A CD ladder solves the classic certificate-of-deposit trade-off: long terms pay more, but they lock your money up. By owning several CDs that mature in different years, you capture most of the higher long-term yield while still having one CD come due every year. This guide walks through how to build a CD ladder in 2026, with a worked example you can copy.
Plan your rungs and see total interest
Open the CD Ladder Calculator →What Is a CD Ladder?
A CD ladder is a set of certificates of deposit with staggered maturity dates. Instead of putting $25,000 into one 5-year CD, you split it across five CDs maturing in 1, 2, 3, 4, and 5 years. Each year one CD matures (a "rung"), and you reinvest it into a fresh 5-year CD at the top of the ladder. Over time, every rung becomes a 5-year CD, but one still matures annually — so you keep both the higher long-term rate and yearly access to a chunk of cash.
How to Build a CD Ladder Step by Step
- Pick your total and number of rungs. A common setup is five rungs over five years, but you can use three or four rungs for a shorter ladder.
- Divide the money equally. $25,000 across five rungs is $5,000 per CD.
- Open CDs with staggered terms — 1, 2, 3, 4, and 5 years — at FDIC-insured banks, keeping each bank under the $250,000 per-depositor limit.
- Shop the APY at every step. Top online banks and credit unions paid far more than the national average in 2026.
- Reinvest at the top. When the 1-year CD matures, roll it into a new 5-year CD. Repeat each year.
Worked Example: A $25,000 Five-Rung Ladder
This example splits $25,000 into five $5,000 rungs, using an illustrative 4.00% APY in line with the top nationally available rates in June 2026 (Bankrate, NerdWallet). Actual rates differ by term and bank.
| Rung | Term | Amount | Illustrative APY |
|---|---|---|---|
| 1 | 1 year | $5,000 | 4.00% |
| 2 | 2 years | $5,000 | 4.00% |
| 3 | 3 years | $5,000 | 4.00% |
| 4 | 4 years | $5,000 | 4.00% |
| 5 | 5 years | $5,000 | 4.00% |
At 4.00% APY, the whole $25,000 earns about $1,000 in the first year, and one $5,000 rung becomes available every 12 months. Run your own amounts and rates in the calculator to see exact interest by rung.
2026 Rates: Shop Beyond Your Local Bank
The gap between average and best CD rates is large. In June 2026, national average CD rates were about 1.24% (3-month), 1.35% (6-month), and 1.55% (1-year), while the best nationally available rates reached roughly 4.00%–4.20% APY at online banks and credit unions (Bankrate, NerdWallet). Picking a competitive bank can more than double your interest, so compare APYs at every rung.
Frequently Asked Questions
What is a CD ladder?
A CD ladder is a set of certificates of deposit with staggered maturity dates — for example, one each maturing in 1, 2, 3, 4, and 5 years. As each CD matures, you reinvest it into a new long-term CD. This keeps part of your money accessible every year while letting most of it earn the higher rates that longer terms usually pay.
How do I build a CD ladder step by step?
Decide how much to invest and how many rungs you want, divide the money equally, and open CDs with terms spaced one period apart (such as 1, 2, 3, 4, and 5 years). When the shortest CD matures, reinvest it at the longest rung. Keep all deposits at FDIC-insured banks under the $250,000 per-depositor limit, and shop for the best APY at each step.
What CD rates can I get in 2026?
In June 2026, the best nationally available CD rates ran roughly 4.00% to 4.20% APY at online banks and credit unions, with short and mid-term CDs paying the most, according to Bankrate and NerdWallet. National average rates were far lower — about 1.24% for 3-month, 1.35% for 6-month, and 1.55% for 1-year CDs — so shopping beyond your local bank matters a lot.
Are CDs in a ladder FDIC-insured?
Yes. CDs at FDIC-member banks are insured up to $250,000 per depositor, per bank, per ownership category. If your ladder is large, spread the CDs across banks or ownership categories so every dollar stays within the insured limit.