Risk-averse investors often are caught in a dilemma. They are wary of investing in the stock market due to its volatile nature. At the same time, they are not happy with the low interest rates offered by savings and money market accounts.
If you find yourself in a similar situation, building a CD ladder might be a good idea, as it allows you to earn a higher rate of interest without taking on additional risk.
Building a CD ladder is a solid way to maximize the returns offered by regular CDs while having access to your money at regular intervals. If you are risk averse and keen on preserving your capital, it can be a valuable addition to your portfolio.
What exactly is a CD ladder? How do you build one? What are the benefits of investing in a CD ladder? Let’s take a look.