In this episode we discuss laddering and the pros and cons. It certainly beats the interest rate you can make at major banks.

Laddering is an investment technique where you purchase several financial products with different maturity dates. You are usually buying bonds or certificates of deposit (CDs), or some sort of fixed income investments. Bonds and certificates of deposit (CD’s) are a time deposit where you get a fixed interest rate depending on how long you lend your money.

Say you have $5,000 to invest in various bonds and CD’s. You want to maximize your interest. It’s February of 2023. You buy (5) $1,000 CD’s all in one day. One that matures in 1 year, 2 years, 3 years, 4 years and 5 years. The longer the maturity, in general, the more interest you make. So a 5 year CD would earn more than a one year CD. As of the publication of this episode in January of 2023, we see rates of 4.40% on 5 year CD's. In a year's time, when your 1 year CD matures, you buy a 5 year CD with that money. In two years time, when your 2 year CD matures, you buy a 5 year CD with that money. You continue that process or ladder each year until the only CD's you have are one's that have the highest interest rate.

Please note you can earn more interest at some places but they require a much higher minimum deposit like $50,000.

How do you find these rates? Simply type best CD rates today or best bond rates today into your search engine. Good Luck!