Comments on: Creating My Modified CD Ladder

By: Dan

Dan — Thu, 04 Dec 2008 19:35:41 +0000

This CD ladder set-up seems pretty useful. Would you be able to do this with ONE bank though (esp. if you are trying to diversify your rates)? And be careful all your money is FDIC insured if you plan on using this approach with more than 250K. It certainly provides a creative form of liquidity….bravo!

By: My Dollar Plan

My Dollar Plan — Tue, 02 Dec 2008 15:07:19 +0000

I’ll be interested to hear at the end of your experiment if you switch to only having them redeem quarterly instead of monthly. I found it was much easier to only shop rates 4 times a year instead of 12. Although, if you plan to just keep them at ING, there’s probably not much work involved…. I also use ING for convenience most of the time!

By: JC in Hartwell

JC in Hartwell — Tue, 02 Dec 2008 14:39:41 +0000

Man you can tell we were cut out of the same cloth.

By: NCN

NCN — Tue, 02 Dec 2008 02:40:42 +0000

@Kym I might look into that, thank you so much for the idea……

By: Kym

Kym — Tue, 02 Dec 2008 02:38:18 +0000

I’m surprised you haven’t tried one of the high interest checking accounts. As a proponent of debit cards, you would easily hit the 10-15 debit transactions required monthly, I’m sure you would pay at least one bill online, then just sign up for online statements which I’m also sure you would already do as well as login to your account once a month, and bam, 6%. I’ve been with Charter’s Turbo Checking since August now and it’s been fabulous:
http://turbochecking.com/

By: Brad Ford

Brad Ford — Tue, 02 Dec 2008 00:30:45 +0000

While your strategy is a fundamentally sound one, you should be aware of the interest rate risk inherent in it. Since interest rates are likely to fall in the coming months, you are unlikely to get 4% on all your future CD purchases.

One other thing, you might find it more adminstratively easier to buy and track a $300 CD every 3 months.

Good luck

By: Earning Trust Online

Earning Trust Online — Mon, 01 Dec 2008 21:04:30 +0000

Great Info and analysis.

By: Shawn

Shawn — Mon, 01 Dec 2008 19:50:07 +0000

This is essentially what I’m doing, but for different reasons. I want to have 6 months of salary stuck aside. Now that my emergency fund is high enough (1 month salary) – we’re taking my wife’s second paycheck each month and dumping $500 of that into a 12 month CD. The idea is that every six months as the CDs mature, we add $500 and we get closer to our goal of 6 months of income saved.

By: Vincent Scordo

Vincent Scordo — Mon, 01 Dec 2008 18:33:25 +0000

Hi,

I think a CD ladder is under used, especially in good times. First step though is to accumulate cash so you can leverage the decent interest rates available.

Here’s an article I wrote on setting financial goals: http://www.scordo.com/blog/2008/11/how-to-set-financial-goals-and.html

Best,
Vince

http://www.scordo.com/blog/blog – a practical living blog