New to building a CD or Bond Ladder?

Finally, I’ve gotten around to building a ladder. I have procrastinated doing so because it seemed like a hassle; buy a one year, and a two, and a three, etc. Then after a year, roll the one year to a five, and on and on. If I knew how simple Fidelity made it, I would have acted sooner. 

Looking for ultimate safety, We decided to use Brokered Certificates of Deposit (CD). As most everyone here knows, Brokered CDs are simply CDs purchased from a broker dealer, in our case, Fidelity. It’s not my purpose to go into detail about the differences between bank and brokered products. I’ll just say that the brokered CD can be a bit more flexible, though there are pros and cons. The size of our ladder should outlast a dreaded ‘lost decade’.

For those who have not yet built a CD or Bond ladder, here is the process at Fidelity. 

Click on “build a ladder”

Select which account to fund the ladder

Click on the desired duration, (in our case, five years)

Input the ladders investment ($100K for example)

Press next

At this step Fidelity displayed the highest paying CDs for each duration (I believe this is updated every 15 minutes)

Choose if you want maturing CDs to be deposited back into your account, or if you want to purchase a new CD at the maximum duration of your ladder (again, five years)

Select “buy”, and you now own five $20K CDs. 

The ladder is totally on autopilot. Easy Breezy.