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CertificatesGet fixed rates with just $500 for terms from 3 to 60 months. Check out the information below if you're not sure how long you want to invest.
Get the Best of Both Worlds by Laddering Your Certificates
You've accumulated substantial savings and you want to earn the best interest. So What’s the best alternative? You can continue earning mediocre dividends with short-term certificates, or you can lock your funds in for a longer term for better earnings. But, if rates rise significantly over the next year or two, your money will be stuck in an investment with below-market rates... Do you put your money in longer-term certificates to get the highest rate? Or do you invest in shorter-term certificates to keep your money more readily accessible - even if it means settling for a lower rate now? Do both.
"Laddering" is a strategy that lets you have it both ways. Say you have $5,000 to invest in certificates. Put $1,000 each into certificates that mature in one, two, three, four, and five years. One year later, your first certificate matures, yielding you $1,000 plus dividends earned. If you need the money, you cash in. If you don't, you reinvest in a new five-year certificate, at current market rates. The next year, the two-year certificate matures. Again, if you don't need the money, you reinvest in a new five-year certificate. By the end of the fourth year, all your money is earning at the five-year rate. Yet a certificate matures each year, so you can tap into the cash if you need it or reinvest at market rates.
Laddering gives you both bigger savings and the advantage of maintaining access to your money. Spreading the maturities from one to five years is just one strategy. You can ladder any way you wish to best meet your financial needs.
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