What is a CD ladder?
Certificates of deposit are designed to mature after a certain period of time, anywhere from three months to five years. The money you invest typically stays locked in until the maturity date. If you cash in a CD before it matures you will have to pay a significant penalty, perhaps more than your interest earnings.
In order to get the best of both worlds — high interest rates as well as having access to your money at regular intervals — you can build what finance experts call a CD ladder.
CD ladder is an investment strategy which involves investing in multiple CDs with different maturity dates so that you can have access to a portion of your investment every time one of those CDs matures.