Model CD Ladders

Short-term CDs have the potential to provide higher rates of return than cash holdings.

Advantages of CD Ladder investing

Opportunities for higher yields

In exchange for being less liquid than cash held in checking, savings, or money market accounts, short-term CDs typically offer higher rates of return.

FDIC insurance guarantee

The CDs we offer are FDIC insured. Since we offer CDs from many different issuers, you can invest more than $250,000 across different issuers and still be fully covered by FDIC insurance.

Auto Roll

Let your CDs return their maturing principal into your account, or, with Auto Roll, elect to automatically invest the maturing principal in another CD whose term to maturity is equal to the length of the ladder (i.e. 1, 2, or 5 years).

3 Model CD Ladders: 1-Year, 2-Year, and 5-Year

*The above image is for illustrative purposes. See our current rates and start building a Model CD ladder

Our various model ladder strategies offer a blend of higher yields typically only available with longer-term CDs, while investing in shorter-term CDs that will mature sooner.



How it works

  1. Choose a Model CD Ladder: 1-year, 2-year, or 5-year.
  2. Select the Fidelity account in which you want to build your Model CD ladder and enter the total amount you want to invest.
  3. Choose whether you want the maturing positions in your CD Ladder to be returned to cash or use Auto Roll to automatically reinvest in new CDs at the end of the ladder.
  4. Review the results and edit as needed before you buy your ladder.

Things to consider


Buy & hold
CD ladders employ a "buy & hold" strategy. Selling your CDs before maturity will incur a charge, and you might risk selling them at a price below your initial investment amount. A CD ladder can be purchased in multiples of $4,000 (for 4-rung ladders) or $5,000 (for 5-rung ladders), so think about how much you want to invest in this less liquid strategy while maintaining a certain amount of liquidity for planned or emergency spending needs.

Yield vs. liquidity
Typically, the longer-dated CD ladders pay higher yields than the shorter-dated ladders because CD rates generally follow the upward sloping rate structure of the yield curve. On the other hand, the 1-year CD ladder has maturities every 3 months. So consider when you will need access to the principal  as a result of the CDs’ maturity intervals, and choose the right ladder for your situation.

Auto roll
As you construct your CD ladder, you’ll be prompted to choose how you’d like to handle the principal generated as your CDs mature:

  • Allow the maturing principal to be returned as cash into your Fidelity account
  • Elect to have the principal from maturing CDs automatically reinvested using Fidelity's Auto Roll service. The reinvestment will be in another new issue CD whose term to maturity equals the length of the Model CD ladder strategy (i.e., 1, 2, or 5 years)

Learn more about Fidelity’s Auto Roll Service

Maintaining your CD ladder
Once you have purchased your CD ladder, the CDs will be viewable in your Positions listings for the specific account. Your CD ladders may also be viewable in the summary listings page dedicated to all bond and CD ladders held. From the ladder page, you will be able to review which of your CD ladders have the Auto Roll functionality enabled and turn it off at any time. Read Understanding Model CD Ladders (PDF) for more information.