Landing on the right Certificates of Deposit (CD) that will help you earn more while you save, takes research, shopping around for rates, and making sure you have terms that align with what you want to financially achieve by a certain time. <\/p>\n\n\n\n
Don’t get us wrong, CDs are an easy low-risk way to reach your savings goals, where you can just set it, forget it, and enjoy it once it’s ready, but the one thing CDs teach us is patience. Patience to leave it where it is with strategies in place to get liquidity while avoiding early withdrawal penalties. <\/p>\n\n\n\n
But what if we told you there’s a way to utilize CDs, where you can access funds at different times based on when you want to achieve different financial goals, like retirement, tax payments, vacation, a new car, a downpayment on a house? The options are endless. <\/p>\n\n\n\n
As you think about what you’d like to financially achieve in a certain period of time, here are three CD strategies that will help you optimize and plan your CD funding. <\/p>\n\n\n\n
If you have a target date that you’d like access to your funds, the CD Bullet is what you’re looking for. Just like an actual bullet, the CD Bullet strategy targets a date in which the saver opens several CDs over several years that will mature around the same time. <\/p>\n\n\n\n
This is a great way to fund long-term savings goals, like buying a house, funding college tuition, taking a dream vacation, or saving for retirement with the best CD rates<\/a>. <\/p>\n\n\n\n Breakdown of CD Bullet: <\/p>\n\n\n\n Laddering is the process of opening several CDs, each with different terms, so that you have a set schedule of funds becoming available providing needed liquidity. This could be to meet an expected cash flow, such as tax payments, quarterly or annual tuition payments, or funding a home renovation. Or it can be a way to keep funds invested until you need them. <\/p>\n\n\n\n For example, you open four CDs, each for $50,000 but with respective terms of 3-, 6-, 9-, and 12-months. Over the coming year, $50,000 will be available every 3 months. Each time a CD has reached its maturity, you’re able to access some or all the cash. Or you can set it up to let each CD roll over into a new 12-month CD, retaining the same 3-month availability in the coming year, while still earning the higher rates typically offered for CDs. <\/p>\n\n\n\n\n
CD Ladder<\/strong> <\/h2>\n\n\n\n