This Is How Much Money You Can Make With $50,000 in a CD Ladder

A CD ladder can be a great way to set up an income stream. By spreading your money among CDs of varying maturities, you can take advantage of the stability of long-term CD interest rates without keeping all of your savings tied up for several years.

But how much can you expect to earn? Here's a rundown of how much a $50,000 CD ladder could earn today, a few things to keep in mind, and why you might want to act fast if you're thinking about setting up a CD ladder of your own.

How much could you earn with a $50,000 CD ladder?

Of course, it's impossible to say exactly how much you can get from a CD ladder. For one thing, different banks offer different CD yields. And it's entirely possible that the highest CD rates offered by the top online banks could change between the time I'm writing this and the time you're reading it.

With that in mind, let's use an example of a $50,000 CD ladder, with $10,000 each in a 1-year CD, 2-year CD, and so on. The plan is that as your CDs mature each year, the money will be reinvested in a 5-year CD at whatever the best interest rate is at the time. Assuming that you are willing to open CDs at different financial institutions, here's what a CD ladder could look like, based on the top CD rates as of this writing.

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of January 8, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of January 8, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

As mentioned, the exact interest rates you get depends on what bank you choose. The best choice for you might not necessarily be the online bank that has the absolute highest yields. It's important to consider other factors like convenience, customer service, and things like the functionality of the bank's online and mobile platforms.

You may want to act quickly

As you can see, our hypothetical CD ladder would earn nearly $2,400 over the first year. However, it's important to mention that since the whole idea of a CD ladder is to open a new 5-year CD with the money that matures each year, there's no way to accurately predict how much your CD ladder could generate in year two and beyond. The good news is that only 20% of your money will need to be reinvested each year, so the income stream will be somewhat stable.

In fact, the Federal Reserve is widely expected to start lowering interest rates in the near future, and to gradually continue doing so through at least the end of 2025. If this happens, CD yields – even at the highest-paying online banks -- are likely to gravitate lower as well.

It's fair to assume that the income from your CD ladder could trend lower over the next couple of years. If you're thinking about setting up a CD ladder, it could be a smart idea to do it before interest rates start to fall.