CD Ladder Earnings Calculator
How It Works
Calculate how much you could earn with a CD ladder compared to a regular savings account. Enter your emergency fund amount and select your ladder structure.
Most people keep their emergency fund in a savings account because it’s easy. But if you’re earning less than 0.5% APY on that money, you’re leaving hundreds - maybe over a thousand - dollars on the table every year. That’s where a CD ladder comes in. It’s not complicated. It’s not risky. And if you set it up right, it can turn your emergency fund from a sleepy savings account into a money-making machine - without locking you out when you actually need cash.
Why Your Emergency Fund Isn’t Working
Let’s say you’ve saved $10,000 for emergencies. You put it in a high-yield savings account and feel good about it. But then you check your statement six months later. You’ve earned $40 in interest. Meanwhile, your neighbor put the same amount into a 12-month CD at 4.25% APY and made $425. That’s over ten times more. And that’s not even a ladder - that’s just one CD. The problem isn’t that you’re bad with money. It’s that most banks don’t make it easy to earn real interest on emergency cash. Savings accounts are convenient, but they’re designed to be low-cost for banks. CDs, on the other hand, pay you to lock your money away. The catch? You can’t touch it without a penalty. That’s where the ladder fixes everything.What Is a CD Ladder?
A CD ladder is just dividing your emergency fund into smaller chunks and putting each chunk into a CD with a different maturity date. Think of it like steps on a ladder. One CD matures in 3 months, another in 6 months, then 12, 18, and 24 months. When one CD matures, you take the money and roll it into a new long-term CD - usually the longest one on your ladder. That keeps the ladder going. This isn’t just theory. In 2025, a $6,000 CD ladder with $1,000 in each of six CDs (maturing every 6 months) earned $217 in interest over a year. The same $6,000 in a savings account at 0.45% APY earned just $27. That’s $190 extra in your pocket - for zero extra effort.How to Build a CD Ladder for Your Emergency Fund
Step 1: Decide how much you need. Most experts say 3 to 6 months of living expenses. If you make $4,000 a month, aim for $12,000 to $24,000. Don’t try to ladder your entire fund - keep at least 1-2 months’ worth in a high-yield savings account for instant access. Step 2: Split it evenly. If you’re using 5 CDs, divide your ladder amount by 5. For a $10,000 ladder, that’s $2,000 per CD. If you’re using 6 CDs, each gets $1,667. No need to overthink it - equal portions work best. Step 3: Choose maturity dates. The sweet spot for emergency ladders is every 3 to 6 months. A common setup: 6-month, 12-month, 18-month, 24-month, and 36-month CDs. This means you’ll have access to cash at least every six months. Some people go quarterly (every 3 months), but that means more CDs to manage. Step 4: Pick the right banks. Rates change daily, so shop around. In January 2026, Ally Bank offered 4.25% APY on a 12-month CD. Marcus by Goldman Sachs had 4.30% on an 18-month CD. Online banks beat brick-and-mortar every time. Don’t forget: FDIC insurance covers up to $250,000 per person, per bank. If you’re laddering more than that, spread it across two banks. Step 5: Automate the reinvestment. When a CD matures, don’t let it sit. Set up an automatic transfer to roll it into the longest-term CD on your ladder. Most banks let you do this online. If you forget, you’ll get stuck with a low-rate, short-term CD - and your ladder breaks.What You’ll Earn (Real Numbers)
Here’s what a $12,000 CD ladder looks like in early 2026:- $2,000 in a 6-month CD at 4.10% → earns $41
- $2,000 in a 12-month CD at 4.25% → earns $85
- $2,000 in an 18-month CD at 4.30% → earns $129
- $2,000 in a 24-month CD at 4.20% → earns $168
- $2,000 in a 36-month CD at 4.15% → earns $249
- $2,000 in a 48-month CD at 4.05% → earns $324
The Real Drawbacks (And How to Avoid Them)
CDs aren’t magic. They come with risks. Early withdrawal penalties are the big one. If you break a 12-month CD early, you’ll lose 3 to 6 months of interest. That’s $50 to $100 on a $2,000 CD. If your car breaks down and you need $1,500 right now - and your only accessible CD doesn’t mature for 4 more months - you pay the penalty. That’s why keeping 1-2 months’ worth in a savings account is non-negotiable. Rate changes can hurt you. If rates jump suddenly, your existing CDs are locked in at lower rates. That’s why you never put your whole emergency fund into a CD ladder. Keep some cash free to take advantage of new, higher rates. False sense of liquidity is the sneaky one. Just because you have a CD maturing every 6 months doesn’t mean emergencies happen on schedule. A sudden medical bill, job loss, or roof leak won’t wait. That’s why 28% of CD ladder users paid a penalty in 2025, according to Bankrate. The fix? Always have a buffer.CD Ladder vs. Alternatives
Here’s how CD ladders stack up:| Strategy | APY (Early 2026) | Liquidity | Best For |
|---|---|---|---|
| Traditional Savings Account | 0.40% - 4.50% | Instant | Those who need instant access |
| Single 12-Month CD | 4.25% | Locked for 12 months | People with predictable cash flow |
| CD Ladder (5-step) | 4.00% - 4.30% average | Access every 3-6 months | Most people with 3-6 months of expenses |
| No-Penalty CD | 3.75% - 4.00% | Withdraw anytime | Those who hate penalties |
| Money Market Fund | 3.80% - 4.10% | Instant (with limits) | Investors comfortable with slight risk |
CD ladders win because they strike a balance. You don’t get the instant access of a savings account, but you get way more interest than you would from a money market fund - and you avoid the rigidity of a single long-term CD.
Who Should Use a CD Ladder?
This strategy works best if:- You have a stable income (no major job uncertainty)
- You’ve already built a 3-6 month emergency fund
- You’re okay with waiting 3-6 months for cash
- You’re in a high-interest rate environment (like 2023-2026)
- You’re willing to set up automatic rollovers
If you’re self-employed, have irregular income, or live paycheck to paycheck, skip the ladder. Stick with a high-yield savings account. If you’re close to retirement or planning a big expense soon (like a home down payment), keep it simple - don’t tie up cash you might need.
What’s New in 2026?
There’s a new option: no-penalty CDs. Ally Bank, Marcus, and others now offer CDs that let you withdraw without penalty after 7 days. The catch? The rate is usually 0.25% to 0.50% lower than a standard CD. So if a 12-month CD pays 4.25%, the no-penalty version might pay 3.95%. That’s still way better than a savings account. Some apps like SoFi and Marcus now automate the whole ladder for you. You deposit $10,000, choose your terms, and they split it into CDs, manage the maturities, and reinvest automatically. It’s not perfect - you pay a small fee - but it removes the hassle.Real Stories
One user on Reddit, u/SavingsStrategist, built a $6,000 ladder with CDs maturing every 6 months. In 12 months, they earned $217. They didn’t need to touch any of it. Another, u/CashFlowWorrier, had a car repair and had to break a 6-month CD early. They lost $38 in interest - but still came out ahead of a savings account. The lesson? Penalties hurt, but they’re manageable if you’ve got a buffer. A teacher in North Carolina used her ladder to match her school calendar. She got paid every 2 weeks during the school year, but had 3 months off in summer. Her ladder matured right before summer break. She used the cash for travel and repairs - no stress, no penalties.Final Rule: Always Have a Buffer
Never put 100% of your emergency fund into CDs. Always keep 1-2 months’ worth in a high-yield savings account. That’s your safety net. When a CD matures, move that money into the buffer first. Then, when you’re ready, roll it into the longest CD. This way, you’re always covered - and always earning.CD ladders aren’t flashy. They don’t make headlines. But in 2026, with rates still above 4%, they’re one of the smartest, simplest ways to make your emergency fund work harder. You don’t need to be a financial expert. Just divide, deposit, and automate. The rest takes care of itself.
Can I build a CD ladder with less than $5,000?
Yes, but it’s harder to make it worth the effort. Most banks require a minimum of $500 or $1,000 per CD. If you only have $3,000, you could do three $1,000 CDs at 6-, 12-, and 18-month terms. You’ll still earn more than a savings account - maybe $80-$120 extra per year. It’s not ideal, but it’s better than nothing.
What happens if interest rates go up after I build my ladder?
You’ll miss out on the higher rates - but that’s true for any long-term investment. The point of the ladder isn’t to chase every rate hike. It’s to earn consistently higher returns than a savings account. When your CDs mature, you can reinvest at the new, higher rates. That’s why keeping a buffer in a savings account helps - you can take advantage of jumps without breaking CDs.
Are CD ladders FDIC insured?
Yes, as long as your total deposits at each bank are under $250,000 per person. So if you have $12,000 spread across three banks, each with $4,000, you’re fully covered. Always check the bank’s FDIC status before depositing.
Do I have to use the same bank for all CDs?
No, and you shouldn’t. Different banks offer different rates. You might get 4.25% at Ally for a 12-month CD, 4.30% at Marcus for 18 months, and 4.10% at Capital One for 24 months. Shop around for each term. Just make sure you don’t exceed the $250,000 FDIC limit at any one bank.
How often should I check my CD ladder?
Set it and forget it. Once your CDs are rolling automatically, you only need to check twice a year: once when a CD matures, and once during your annual financial review. Most people over-monitor. The goal is to earn interest, not track daily rate changes.
Is a CD ladder better than a high-yield savings account?
It depends. If you need cash every week, stick with a savings account. If you can wait 3-6 months for access, the CD ladder wins - hands down. Over a year, you’ll earn 2-3 times more. The trade-off is liquidity. But with a buffer, you get the best of both worlds.
Next Steps
Start small. Pick one CD. Put $2,000 into a 12-month CD at a top online bank. Then, open a high-yield savings account and move $1,500 there. Next month, open a 6-month CD with another $1,500. You’ve just started your ladder. In 6 months, you’ll have your first payout. That’s when you’ll see the real difference.Don’t wait for the perfect rate. Don’t wait until you have $20,000. Start now. Even a tiny ladder beats a savings account. And in 2026, with rates still high, that’s the smartest thing you can do with your emergency fund.