A deposit ladder against a single long deposit. The ladder gives up part of the term premium and buys regular access, which is a liquidity purchase rather than a return strategy.
Also called: fd ladder calculator, deposit laddering.
4.35% blended across 5 rungs of $10,000.00 each, against 4.6% for putting everything in the longest deposit. You give up 0.25% points for access to $10,000.00 every 12 months.
This is what the calculation gives for the numbers you entered. It is an estimate, not advice, and it knows nothing about your situation beyond those numbers. Rules for United States change on a published schedule; the effective date is shown on every rule-based tool.
The amount is split evenly across maturities from shortest to longest, with rates interpolated between the two ends. The blended rate sits below the longest rate, and that difference is the price of the liquidity. As each rung matures it can be reinvested at the long end, so a mature ladder eventually pays close to the long rate while still returning cash regularly. The trade is explicit: a ladder buys access, not extra return.
the blended rate averages the rungs, which sits below the longest rate and above the shortestEach of these is asserted on every build. If a change to the engine ever moved one of these answers, the build would fail before the page could print it.
Blended rate4.35%
The five rungs interpolate to 4.1, 4.225, 4.35, 4.475 and 4.6, whose mean is 4.35. The sacrifice is 4.6 less that.
Open this exampleBlended rate4.4%
boundary: with no term premium there is nothing to give up, so the ladder is free
Open this exampleFormula version 1.0.0 · definition 1.0.0 · United States · Report a problem with this calculator