SUMMARY: Share certificate ladders maximize your earnings while minimizing your exposure to interest rate risk.

With interest rates in a constant state of fluctuation, it’s hard to know how best to manage your savings. But if you have funds parked in a savings account, there might be some better options available.

Of course, it’s important to remember that savings options aren’t one-size-fits-all and choosing the right one for you involves weighing your goals and needs. If you’re looking for something with the flexibility of a shorter share certificate but with the potential returns of a longer one, a share certificate ladder might be right for you.

Ladders are a low-risk investment option. Your interest rate is locked in for the full period of each certificate, provided you hold the certificate until maturity. (You could incur a penalty if you break the ladder early.) This safety net is particularly appealing for conservative investors who want to grow their savings without exposure to the volatility of the stock market or for those investors wishing to balance out their portfolio with a lower risk investment.

Simply put, a share certificate ladder is an investment in several linked share certificates with different maturity dates. We offer differing lengths of terms designed to fit your needs, with each rung representing a longer term than the previous rung. The Credit Union offers three ladders certificate options: with a 30- and 60-month term; a 12-, 24- and 36-month term; and a 12-, 24, 36-, 48- and 60-month term, depending on which one seems right for you.*

Each term amount must have equal deposit amounts, with a minimum $1,000 investment per certificate. The rates for each are traditionally higher in ladders than if taken out individually and when the first certificate matures, you have the option to redeem or renew the funds.

For example, you could allocate an equal portion of your savings to a 12-month certificate, another to a 24-month certificate, and another to a 36-month certificate. This laddering strategy allows you to access your funds at different intervals, providing liquidity and ensuring that you can take advantage of potentially higher interest rates as shorter-term certificates mature.

If you redeem the funds, you break the ladder and the remaining certificates simply become individual certificates at their current rates. However, if you allow the funds to renew, they do so at the market rate of the longest-term certificate. Please note: The certificate renews at the current rate at the time of renewal, not the previous rate of your existing highest maturity.

By always replacing the longest maturity you’re always reaping the benefit of getting the highest rates. Also, by having a ladder, you’re only reinvesting a portion of your investment when yields are low.

By strategically laddering your investments, you can balance your need for liquidity with your desire for higher returns, all while enjoying the peace of mind that comes with investing your funds with a trusted financial institution like the Credit Union.

And over time, the ladder smooths out the peaks and valleys of rate fluctuations. This a smart way to protect yourself against changing interest rates while giving you the security of liquidity. You can rest comfortably knowing that you’ll be able to access some of your money within a relatively short time frame while making the most of it while not in use.

To apply for a share certificate ladder today, click here. To learn about our share certificate ladder rates and fees, click here.

*Minimum investment of $1,000 per term. 30-, 48- and 60- month certificates arealso available. applicable rates, terms and conditions on your Share Certificate Ladder will be provided at account opening if in person or within 10 business days if received by mail.