Anyone considering CD ladders now that the rate is climbing

[Slim11]

Just asking, I myself am pondering this idea for next year. I know anything can happen by that time, but I like to overthink stuff. This way when its time to act on something I am not thinking about it, just doing it. So, who is using cd ladders? Whos Thinking about it? Pros and cons? Do you set up a five year strategy? Is this only for big money? Or can you invest a small amount? Just gathering information. Thanks.

 

[pb4uski]

Many of us have shifted from bond funds/ETFs to CD/bond ladders for our fixed income. Surf around any you'll find plenty of threads on the topic.

 

[Car-Guy]

Several folks here have said they laddering in other related threads. I started mine back in ~September last year and bought a ton of them for 6 to 18 mos. They'll start maturing soon and I'll re-buy those for another 6 to 18mos. I don't want anything out more than maybe 3 years. (At the most)

 

[Rickt]

Have set up CD/Bond ladder for our monthly expenses for 3 years and also for Emergency Funds .

Thanks to good folks on this forum who shared their wisdom!

 

[dmpi]

I started buying in early Jan buying a 12-18 months out. Rates still look like they're inching up so maybe I've jumped the gun. Regardless I still have a lot of cash to get into CDs but right now SWVXX is paying 4.4% and the 12 month CD is like 4.7% so I don't think it's worth the risk to lock in. I would guess my 'holy grail' would be something like 5.2% for 2 or 3 years which is what I did in 2008.

 

[Car-Guy]

I started buying in early Jan buying a 12-18 months out. Rates still look like they're inching up so maybe I've jumped the gun. Regardless I still have a lot of cash to get into CDs but right now SWVXX is paying 4.4% and the 12 month CD is like 4.7% so I don't think it's worth the risk to lock in. I would guess my 'holy grail' would be something like 5.2% for 2 or 3 years which is what I did in 2008.

True (actually 4.48 at this time) and True IMO


I'll probably balance my maturing CD's between new CD's (out to 18 mos) and SWVXX, until it starts to drop.

 

[COcheesehead]

We’ve been living off a bond ladder since retiring in 2020. Will continue to do so for years to come.

 

[Al18]

I’ve been investing in CD ladders for 30 years now, and will continue to do so. 3 year CD ladders seem to be the sweet spot right now.

 

[MC Rider]

We have 3 uneven steps of uneven timing atm. But I needed to park that dough. When the first matures I can re arrange a bit. I was able to "bump" the rate on one from late November by almost 1/2% recently. Nice feature for the CU to offer imho.

 

[pb4uski]

I have fairly even rungs each quarter for the next 3 years and am extending to 5 years as rungs mature.

 

[PointBreeze]

I put together a 5 year CD ladder in Oct/Nov, which will cover most of my spending over that period.

 

[jazz4cash]

Just asking, I myself am pondering this idea for next year. I know anything can happen by that time, but I like to overthink stuff. This way when its time to act on something I am not thinking about it, just doing it. So, who is using cd ladders? Whos Thinking about it? Pros and cons? Do you set up a five year strategy? Is this only for big money? Or can you invest a small amount? Just gathering information. Thanks.

You are late to the party. Rates peaked around Oct ‘22. That’s not to say they will go straight down….it’s not too late to jump on board IMO especially if you are laddering out for a few years. Most here seem to prefer under 5 yrs. I’ll go out further but my ladder rungs are small. Laddering gives a nice rolling average. I won’t get fully invested at the peak but I won’t be stuck at the bottom either. We have several threads going on how to manage various fixed income opportunities. Look around.

 

[COcheesehead]

You are late to the party. Rates peaked around Oct ‘22. That’s not to say they will go straight down….it’s not too late to jump on board IMO especially if you are laddering out for a few years. Most here seem to prefer under 5 yrs. I’ll go out further but my ladder rungs are small. Laddering gives a nice rolling average. I won’t get fully invested at the peak but I won’t be stuck at the bottom either. We have several threads going on how to manage various fixed income opportunities. Look around.

+1
I am out about 9 years. All my maturing bonds get reinvested on the long end. All I care about is lots of cashflow, capturing the highest yield is just not something I can do consistently, but my luck has been good with just a mechanical process as I described. I have a bunch of tax free income and even with that my total yield is about 5.2%.