Calculate earnings on CDs and compare different terms
A Certificate of Deposit locks your money at a fixed interest rate for a set term. In exchange for not accessing your money, you earn a higher rate than a regular savings account. Early withdrawal typically incurs a penalty, so choose a term that matches your financial timeline.
CD laddering involves splitting your money across CDs with different maturity dates. For example, instead of putting $25,000 in one 5-year CD, you might split it into five $5,000 CDs maturing at 1, 2, 3, 4, and 5 years. This gives you periodic access to funds while still earning higher long-term rates.