Certificate Laddering

  • March 1, 2023
  • Financial Partners Credit Union | Time to Read: 3 Minutes

Benefits to Certificate Laddering

What is Certificate Laddering?

In today’s world, “guaranteed returns” seems a little too good to be true. How can an investment be guaranteed, and how do you ensure you’re getting the most out of it?

Enter Certificate Laddering.

Certificate Laddering might be the answer you’re looking for if you want to take advantage of the high dividends that have continued to rise over the past several months. Certificate Laddering offers everyday people the opportunity to take a large sum of money and spread it across several certificate options at a gradually higher interest rate. Here are the top 5 reasons you should consider Certificate Laddering as your next investment move.

5 Reasons to Take Advantage of Certificate Laddering (Now While the Dividend Rates are Climbing!)


  1. Never Miss a Rate Increase. When Federal Reserve interest rates rise, it’s time to start earning more! Certificate rates have been increasing exponentially in the past few months. Certificate Laddering allows you to take advantage of the next highest rate by rolling over the maturing Certificate into the next highest interest rate.
  2. Maintain Liquidity. Everyone wants access to their funds as quickly as possible. With Certificate Laddering, you can access your investments sooner than later by taking advantage of shorter-term Certificates (think anywhere between 3-8 month terms) rather than having your money locked up in a long-term certificate. When staggering investments, you will have access to your shorter-term maturing Certificates faster and sooner.
  3. Minimize Risk. By laddering Certificates with different maturing dates, you can minimize the risk of sudden dividend rate changes so not all your Certificates will mature at the same time when dividend rates start to decline.
  4. Diversify Your Portfolio. You can diversify your portfolio by allocating funds into several Certificates with varying maturity dates and dividend rates.
  5. Improve Cash Flow. Have peace of mind knowing your certificate investments mature at varying times over the years with laddering. Through this savvy investment tactic, you will have a steady stream of income you can access sooner instead of waiting for a large sum to mature over time.

Certificate laddering example graph

Source: NerdWallet.com


Whether you’re an investing pro-- or just starting out-- there are huge advantages to Certificate Laddering. With the laddering technique, you have more options for your investments without having to feel the pressure of a long-term commitment Certificate. With guaranteed returns and climbing dividend rates, now is the time for investors of all ages to take advantage of the benefits Certificate Laddering offers.