How this calculator works
A CD ladder splits one pot of savings into several CDs with staggered terms, so one of them matures every few months. The money that comes free can pay a big yearly bill or roll into a new longest-term CD, and only one rung is ever locked up for the full term. Enter the amount, how many CDs and how often one should mature; leave the APY blank to price each rung at the FDIC national average for its term.
- Each rung = money to ladder ÷ number of CDs. Rung k has a term of k × the step (3, 6 or 12 months).
- Interest on a rung = rung × ((1 + APY ÷ 100)^(term in months ÷ 12) − 1).
- Default APY for a term = the FDIC national average for that term, interpolated in a straight line between the published 3, 6, 12, 24, 36, 48 and 60-month rates.
Worked example
With these inputs: money to ladder $10,000; number of cds 5; one cd matures Every 12 months.
The result is interest by the time the last rung matures (5 years) $428.48, with each cd (rung) $2,000.00, one maturing every year and average apy across the rungs 1.47%. Each rung that matures can pay a bill that's due then, or roll into a new CD at the longest term so the ladder keeps one CD maturing on schedule. Cashing a CD early usually costs a penalty of several months' interest.
Why ladder instead of one CD?
One five-year CD locks every dollar up for five years. A five-rung ladder has a CD maturing every year, so you can reach a fifth of the money without an early withdrawal penalty, and when a rung matures you can pay the bill that's due or renew it at the longest term. Once every rung has rolled into a five-year CD, the whole ladder earns the five-year rate while one CD still matures each year: at the 1.38% FDIC average that's about $138.00 a year on $10,000, against $37.00 in savings at 0.37%.
With your bank's rate the gap is bigger. At 4.00% APY on every rung, the same $10,000 ladder earns $1,265.95 by the time the five-year CD matures.
Match the rungs to your bills
A ladder works best for money with a known date. List the big irregular bills in your sinking fund or yearly expenses, then choose the step: every 3 months for quarterly estimated taxes, every 6 months for car insurance, every 12 months for a property tax or membership renewal. A 4-rung, 3-month ladder of $12,000 frees $3,000 each quarter and earns $116.67 in its first year at FDIC average rates.
Keep the first few months of your emergency fund in savings or a money market account you can reach the same day; a ladder suits the part of the fund beyond that, and money for goals a year or more away.
FDIC national average CD rates (September 2026)
3 months 1.13%, 6 months 1.41%, 12 months 1.73%, 24 months 1.61%, 36 months 1.36%, 48 months 1.28% and 60 months 1.38%. Averages are a floor to beat: many banks and credit unions pay well above them, so price your ladder with a real offer too. To turn a quoted interest rate into the APY to enter here, use the APY calculator. For one CD on its own, Monthly Income Booster's CD calculator prices interest, APY and the early withdrawal penalty.
Each CD at an FDIC-insured bank is covered up to $250,000 per depositor, per bank, per ownership category, and CD interest is taxable in the year it's credited.
Sources
Frequently asked questions
What is a CD ladder?
Several CDs with staggered terms, for example 1, 2, 3, 4 and 5 years, so one matures every year. You use the money that matures or renew it at the longest term, which keeps one CD coming due on schedule.
How much will a $10,000 CD ladder earn?
Split into five $2,000 CDs of 1 to 5 years at the FDIC national averages for September 2026, $428.48 by the time the five-year CD matures. At 4.00% APY on every rung, $1,265.95.
How many rungs should a CD ladder have?
Enough that one matures as often as you need cash. Five yearly rungs is the classic ladder; four quarterly rungs suit quarterly bills; six-month rungs suit insurance premiums.
Is a CD ladder good for an emergency fund?
For part of it. Keep at least the first month or two in savings you can reach the same day, and ladder the rest so a rung is never far from maturing. Breaking a CD early usually costs several months' interest.
What happens when a rung matures?
You can take the cash to pay a bill or renew it as a new CD at the longest term in the ladder. Many banks renew automatically after a short grace period, so set a reminder for each maturity date.