BUILD YOUR CD LADDER WITH MONEYLADDER.COM

A CD ladder is a rather safe investment. Essentially, you use tiers of CDs to invest. You start by opening multiple CDs, each with different expiration term dates. Let's say you have $5,000 to invest. You could open the following accounts:

• $1000 12-month CD @ 2.25%
• $1000 2-year CD @ 2.35 %
• $1000 3-year CD @2.70%
• $1000 4-year CD @3.00%
• $1000 5-year CD @3.30%

After one year goes by, the cash from the expiring CD is used to reinvest in another CD one period older than the oldest CD currently in the ladder. In our example above, you would use the matured 1-year CD (plus the interest it made) to open a new 5-year CD, and the cycle begins. Every CD is FDIC insured up to $250,000, so this is a safe way to invest.

How does MoneyAisle.com come into play?

MoneyAisle.com is an online banking system in which banks bid to win your money. All MoneyAisle banks are FDIC insured. You select an account type (either a CD or High Yield Money Market), enter in the dollar amount you wish to invest, your State, zip code, and hit enter. The bidding process is live and a bit entertaining. Once the final bid is entered, you are allowed thirty minutes to accept the offer.

I entered $5000.00 for a 12-month CD and received an offer for 2.26% APY. I compared my offer to the current offers shown at Bankaholic.com and there was only one bank (newdominionDIRECT.com) that offered the same rate. A majority of the banks were at a flat 2.00% APY. My own local credit union, Navigant Credit Union, only offers 1.50% APY for the same CD.

I built my CD ladder using MoneyAisle.com (there is a separate link for a CD ladder, very convenient) and I'm sure I'm getting the best rates.