What is a CD Ladder?

A CD ladder is a savings strategy to spread cash equally across multiple certificates of deposit to take advantage of higher rates — usually in long-term CDs — while freeing up portions of that money at short-term intervals.  CDs typically have the highest interest rates among savings accounts at the cost of setting funds aside for a period. A CD ladder provides an effective alternative to putting a lump sum of money in only one short- or long-term CD.