MoneyWisdom Blog

Earn More With a Certificate Laddering Strategy

Posted by MoneyWisdom Newsletter on Apr 1, 2019 4:12:01 PM


Hanscom FCU’s certificate accounts are a smart and safe way to reach your savings goals while letting you earn a great rate. However, you can earn even more when you use a laddering strategy with your certificates.

A laddering strategy simply means putting your money in multiple certificates that mature at different times instead of putting all your money in a single certificate that matures at one time. When interest rates are climbing, a certificate ladder lets you take advantage of rising rates. You can take your maturing certificates and reinvest them into new certificates that are earning a higher dividend rate. And if interest rates happen to fall, you’re still safe because you still have money locked into certificates with higher rates. This laddering strategy also gives you more availability to your funds if you need them because you’ll always have a certificate maturing on a regular schedule.

Here’s how it works: Let’s say you have $10,000 of long-term savings. Instead of pouring it all into a single 60-month certificate, with a laddering strategy you could put $2,000 into five separate certificates: a 60-month, a 48-month, a 36-month, a 24-month, and a 12-month. When your 12-month certificate matures, you roll it into a new 60-month certificate account, and repeat the process as each of the other four certificates matures.

Hanscom FCU can help you climb a little faster toward your financial goals with our great rates on certificates. Open a certificate online, call us at 800-656-4328, or stop by one of our 21 branches to get a leg up on your savings today.

Open a Certificate Today!

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Topics: Hanscom FCU, Personal Finance

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