Personal Finance Buzz

While it can be tempting to simply put your money in a CD and let it sit there, it is important to consider another option: The CD ladder.

If you are interested in starting a CD ladder, you will need to make plans for getting the money together to start.

GICs provide a guaranteed form of income provided you lend your money for a set amount of time. There is a way to increase the flexibility of when you can withdraw and decrease the risk of investing at a low interest rate.

You can get slightly higher CD rates — and the potential for better yields in the future — if you take your emergency fund and ladder it using short-term CDs.

Creating a CD ladder is a great way to combine the high interest rates of long-term CDs with the liquidity of short-term CDs. Years ago, laddering certificates of deposit was a lot of work. Not only did you have to go down to your bank to open up multiple CD accounts, but your options were very limited.

A reader asked about building a CD ladder. Help her out with your opinion in the comments!

If you want to get a little bit more out of your cash, you can make use of CDs. Certificates of Deposit (CDs) are cash products that allow you to get a fixed rate of return over a set period of time. In most cases, CDs offer a higher yield than most savings accounts, allowing you to practice capital preservation with a little more growth than you would normally see in an ordinary savings account cash product.