Personal Savings

Calculator Even making small changes to your regular, everyday behaviors can really add up over time. The real keys to success are commitment and consistency. Remember, every dollar you save is an investment in your financial future. So let's get started. From tips to tools, we'll give you the information and assistance you need to succeed.

SAVINGS STRATEGIES   TAX REFUND & BONUSES   TIPS FOR SAVING $   CERTIFICATE LADDERING   CALCULATORS  

CERTIFICATE LADDERING

What is "certificate laddering" and why could it be a good idea?

"Laddering" means buying several certificates at once for different terms. Laddering your certificates can allow you to increase your liquidity - or cash you can easily access - while taking advantage of higher rates, because certificates for longer terms like 60 months usually pay higher rates than shorter term certificates.

Start by buying several savings certificates at one time, each with a different maturity date. Each time one of your certificates matures, you can roll it over into a new certificate with a longer term and higher rate.

For example, if you have $10,000 to invest to start, you can purchase 5 savings certificates at $2,000 each:

  • Certificate #1 for a 6-month term
  • Certificate #2 for a 12-month term
  • Certificate #3 for a 24-month term
  • Certificate #4 for a 36-month term
  • Certificate #5 for a 60-month term

When the 6-month certificate matures, roll it over into a 60-month certificate, and do the same as the 12-, 24-, and 36-month certificates mature.

In only 4 years you will have a 60-month certificate maturing every year. That way, you have access to cash every year as a certificate matures, but can take advantage of higher interest rates on 60-month certificates.

This ladder will work with different terms or different amounts to best meet your financial goals. For more information about certificate options at Virginia Credit Union, and how we can help you make financial progress, please contact us.