When it comes to saving money, most people face a familiar challenge: Do you lock in your money for a longer term to earn a higher rate, or keep it accessible in case you need it?

Fortunately, you may not have to choose.

A strategy called certificate laddering can help you earn competitive returns while maintaining regular access to your funds.

What Is Certificate Laddering?

Certificate laddering is a savings strategy where you divide your money among multiple certificates with different maturity dates rather than putting everything into a single certificate.

For example, if you have $10,000 to save, you could divide it into four $2,500 certificates:

• 5-Month Certificate
• 11-Month Certificate
• 16-Month Certificate
• 24-Month Certificate

As each certificate matures, you can either access the funds or reinvest them into a new long-term certificate. Over time, you’ll create a “ladder” where a certificate matures at regular intervals, giving you ongoing access to your money while still benefiting from fixed certificate rates. Financial experts and savers frequently use this approach to balance earnings and flexibility.

Why Members Use Certificate Ladders

Higher Earning Potential

Certificates often offer higher dividend rates than traditional savings accounts. By laddering your funds, you can take advantage of certificate earnings while avoiding the risk of locking all your money into a single term.

Improved Access to Your Money

Instead of waiting years for one large certificate to mature, a ladder creates multiple maturity dates. This can provide opportunities to access funds periodically without paying early withdrawal penalties.

Protection Against Changing Rates

Interest rates can rise and fall over time. Laddering helps reduce the risk of investing all your money at the wrong time because portions of your savings mature regularly and can be reinvested at current rates.

How a Ladder Works

Let’s say you invest $16,000 and split it equally among four certificates with varying terms.

Month 5:

• Your 5-Month certificate matures.
• You can use the funds or reinvest them into a new certificate (perhaps longer-term to keep the ladder going).

Month 11:

• Your 11-Month certificate matures.
• Again, you can withdraw or reinvest.
• And so on!

After several months, you’ll have a ladder of longer-term certificates, with one maturing every few months, or even years. This provides a balance of growth and liquidity that many savers find appealing.

Is Certificate Laddering Right for You?

Certificate laddering may be worth considering if you:

• Have money beyond your emergency fund.
• Want predictable earnings.
• Prefer lower-risk savings options.
• Like having access to a portion of your funds on a regular schedule.
• Are saving for future goals such as a home purchase, education expenses, or retirement.

Build Your Ladder with UHFCU

With UHFCU’s 5-Month Certificate at 3.55% APY* and 11- and 16-Month Certificates at 3.77% APY*, now is a great time to put a laddering strategy to work.

By combining different certificate terms, you can enjoy the confidence of fixed returns, the convenience of regular maturity dates, and the opportunity to keep your savings growing.

Explore our current certificate specials and see how a certificate ladder can help you take the next step toward your financial goals.