CD Ladder Calculator: Rungs, Maturities, and Total Interest
Split a deposit across three, four, or five CDs with staggered terms, enter the APY for each rung, and see total interest, the blended yield, and when each rung matures. The result is compared with putting everything in one short CD or one long one.
Split equally across the rungs
Number of rungs
Rung spacing
Maturing rungs roll into the longest term at the top APY
1 year CD, $5,000
2 years CD, $5,000
3 years CD, $5,000
4 years CD, $5,000
Total interest over 5 years
$4,586
$20,000 grows to $24,586 with rungs rolling as they mature
Blended APY
4.14%
year one, averaged across rungs; 4.21% a year realized over the run
First rung matures in
1 year
then one rung comes due every 1 year
Same money in one short CD, rolled
$4,333
the ladder earns $253 more at the 4.00% short rate
Same money in one long CD
$4,627
but nothing matures for 4 years
Rung by rung
| Rung | Term | Amount | APY | Interest at first maturity | Matures in |
|---|---|---|---|---|---|
| 1 | 1 year | $5,000 | 4.00% | $200 | month 12 |
| 2 | 2 years | $5,000 | 4.10% | $418 | month 24 |
| 3 | 3 years | $5,000 | 4.20% | $657 | month 36 |
| 4 | 4 years | $5,000 | 4.25% | $906 | month 48 |
After its first maturity each rung is reinvested in a new 4 years CD at 4.25%, with rates held flat. Interest is counted through the end of your horizon even if a rung is mid-term at that point.
The problem a ladder solves
A single certificate of deposit forces one choice: a short term that stays reachable but pays less, or a long term that pays more but locks the money away. A ladder splits the deposit into rungs with staggered terms, so part of the money matures on a regular schedule while the rest earns the longer rates. You keep liquidity every few months without giving up the long-term yield on most of the balance.
How the rungs are built and rolled
The calculator divides your deposit equally across the rungs. With one-year spacing and four rungs, the terms are one, two, three, and four years. Each rung compounds at its own APY until it matures. When the first rung comes due, you reinvest it in a new CD at the longest term, so after the initial cycle every rung is a long CD and one still matures every spacing interval. The projection assumes each maturing rung rolls into the longest term at the top rung's APY, with rates held flat, and counts the interest accrued through your chosen horizon. Real rates move, so treat the total as a shape rather than a promise.
Worked example: $20,000 on a four-rung yearly ladder
$20,000 split into four $5,000 rungs at 4.00%, 4.10%, 4.20%, and 4.25% APY. Over 5 years, with each maturing rung rolling into a new four-year CD at 4.25%, the ladder earns about $4,586. The same $20,000 rolled through one-year CDs at 4.00% earns about $4,333, and the first $5,000 is back in hand after twelve months either way. The ladder's edge is the $253 from the longer rungs, earned without locking the whole balance for four years.
Early withdrawal penalties on CDs, in words
Breaking a CD before maturity usually costs a slice of interest, commonly a few months' worth on short terms and more on long ones, and the bank sets the formula. If the CD is young enough, the penalty can eat into principal. The ladder exists to make breaking one unnecessary: a rung is always close to maturing, so a planned expense can wait for the next one. Keep a separate cushion for true emergencies in high-yield savings, where there is no term to break.
When laddering is worth the bookkeeping
A ladder earns its setup effort when the balance is large enough for the gap between short and long rates to matter, when you have a known series of expenses over the next few years, and when you want to lock rates before they fall. It matters less when short and long rates are nearly equal, which happens; then a savings account or a single short CD does the same job with fewer moving parts. The CD calculator shows any single rung in detail, including the same deposit across other terms.
Frequently asked questions
What is a CD ladder?
A set of CDs with staggered maturities, such as one, two, three, and four years, funded from one deposit. As each matures you reinvest it at the longest term, so eventually every CD is long-term while one still comes due on a regular schedule. It blends the higher rates of long CDs with regular access to part of the money.
How many rungs should a CD ladder have?
Three to five is the common range. More rungs mean more frequent maturities and smoother access, but smaller amounts in each CD and more accounts to track. Fewer rungs are simpler and put more money in the longer, usually higher-paying terms. The calculator lets you compare both spacings and any rung count with the same deposit.
What happens when a rung matures?
The bank pays out the principal plus interest, and most CDs renew automatically unless you act during the grace period. In a ladder you would typically reinvest it in a new CD at the ladder's longest term, which keeps the cycle going, or take the cash if you need it. Check the renewal window so the money does not roll into a term or rate you did not choose.
Is a CD ladder better than a high-yield savings account?
It depends on the rates on offer and on how sure you are that you will not need the money. Savings accounts keep everything available and their rates can change at any time; a ladder locks each rung's rate for its term and gives up some access in exchange. When long CD rates sit well above savings rates, laddering tends to earn more; when they are close, savings wins on flexibility.
Can I break a CD early if I need the money?
Usually, with a penalty that is typically a set number of months of interest, larger on longer terms. If the CD is very new, the penalty can exceed the interest earned so far and come out of principal. A ladder is designed so you rarely have to: a rung is always approaching maturity.
Does this calculator save my numbers?
No. Everything runs in your browser and nothing you type is stored or sent anywhere.
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