CD Ladder Calculator
$
5 rungs
%
%
Blended APY4.50%
Total at Maturity$11,496.44
Total Interest$1,496.44
| Rung (yr)↕ | Principal↕ | APY↕ | At Maturity↕ |
|---|---|---|---|
| 1-year | $2,000.00 | 4.00% | $2,080.00 |
| 2-year | $2,000.00 | 4.25% | $2,173.61 |
| 3-year | $2,000.00 | 4.50% | $2,282.33 |
| 4-year | $2,000.00 | 4.75% | $2,407.94 |
| 5-year | $2,000.00 | 5.00% | $2,552.56 |
A CD ladder spreads your savings across several certificates of deposit with staggered maturities so that one rung comes due every year. This calculator splits your principal evenly across the rungs you choose, applies a base APY that steps up for each longer term, and projects the value of every rung at maturity. The result is a blended yield close to long-term rates while keeping cash regularly accessible as each rung matures.
Formula
rungValue = (principal / N) × (1 + APYᵢ)^termᵢ; blendedAPY = average(APYᵢ)
- principal
- Total amount invested across the ladder
- N
- Number of rungs (and the longest term in years)
- APYᵢ
- Annual percentage yield for rung i (base + step × (i−1))
- termᵢ
- Term of rung i in years (1, 2, ... N)
How it works
- Enter the total amount you want to invest and choose how many rungs (years) the ladder should span; the principal is divided equally among them.
- Set the base APY for the shortest one-year rung and an APY step that is added for each additional year of term, reflecting the higher rates longer CDs usually pay.
- Each rung grows by its own APY compounded annually over its term, and the calculator reports the maturity value of each rung, the total at maturity, and a blended APY across the whole ladder.
Worked example
You invest $10,000 in a 5-rung ladder with a 4% base APY and a 0.25% step per rung.
- Each rung gets 10000 ÷ 5 = $2,000.
- APYs by rung: 4%, 4.25%, 4.5%, 4.75%, 5%, averaging to a 4.5% blended APY.
- The 1-year rung matures at 2000 × 1.04 = $2,080; the 2-year rung at 2000 × 1.0425² ≈ $2,173.61.
A blended APY of 4.5%, with $2,000 in each rung maturing one year apart.
Frequently asked questions
- Why build a CD ladder instead of one long CD?
- A ladder gives you regular access to a portion of your money as each rung matures, while still capturing most of the higher yields that longer terms pay. It reduces the risk of locking everything in right before rates rise.
- What happens when a rung matures?
- A common strategy is to reinvest each maturing rung into a new long-term CD at the top of the ladder. That keeps the ladder rolling and gradually shifts the whole balance toward the highest available rate.
- How is the blended APY calculated here?
- Because the calculator splits principal evenly, the blended APY is simply the average of the individual rung APYs. With unequal allocations it would be a principal-weighted average instead.
- Does this assume simple or compound interest?
- Each rung compounds annually over its term, so a 3-year rung earns interest on its prior interest twice. Real CDs may compound more frequently, which would slightly increase the totals.