What’s a "certificate" and why is it called a “ladder”? Let me break it down…
First, let me start off with the question - what is a CD? And no, I am not referring to those circular disks from the 90s we used to listen to music in a stereo. This type of CD is defined as a certificate of deposit. At credit unions, we call them “Share Certificates”. A CD is a product where you place your money in an account for a period of time (as little as 3 months or as long as maybe 5 years) while you earn a higher interest rate; typically more than your savings or checking accounts. U.S. Eagle offers a product that most banks or credit unions don’t…ahem, drum roll please…the LADDER CERTIFICATE!So, what is this infamous ladder certificate you ask? It is five CDs (share certificates) in one. The ladder consists of a one year, two year, three year, four year, and five year share certificates. Each one of these certificates will earn the 5-year interest rate. When the 1-year CD matures, (meaning coming up for renewal) it will automatically turn into the 5-year CD, while the 2-year CD is now the 1-year (because you only have a year left for maturity), and the 3-year becomes the 2-year, and so on.
The unique thing about this ladder certificate is you can contribute to the CD whenever you have $1,000.00 or more to equally disperse amongst the CDs, (in this case, $1,000.00 will be split into all 5 of the CDs) all the while you still earn the interest rate of the 5-year CD.This sets the Ladder Certificate apart from other CDs because it allows you to make continuous equal deposits into each of the 5 CDs whenever you want as long as you do not break your ladder. If you do close out any of the CDs when they mature, you can no longer contribute to the remaining CDs.
So, save up some money and invest it. You'll make money on your money. Plus, you'll sound cool when you explain this investment to all your pals, "Yeah...just invested my money in a ladder certificate...oh you don't know what that is?"