CD Ladder Calculator: Rungs, Rates & Interest 2026

How a CD ladder is worked out

A CD ladder splits the deposit into equal rungs: the rung amount is the deposit divided by the number of rungs. Each rung compounds once a year at its own rate for its own term, so rung i matures at the rung amount times (1 + rate) to the power of i, and the rung interest is the maturity minus the rung amount. The total maturity is the sum of the rung maturities, the total interest is the sum of the rung interests, and the first-year interest is the sum of each rung amount times its rate, because every rung earns its first year in year one.

At the defaults — deposit $10,000, 5 rungs, rates 4.00%, 4.10%, 4.20%, 4.30%, 4.50% — each rung is $10,000 ÷ 5 = $2,000. The maturities are $2,000 × 1.04 = $2,080.00, $2,000 × 1.041² = $2,167.36, $2,000 × 1.042³ = $2,262.73, $2,000 × 1.043⁴ = $2,366.83 and $2,000 × 1.045⁵ = $2,492.36. The total maturity is $11,369.29 and the total interest is $1,369.29. The first-year interest is $2,000 × (4.00% + 4.10% + 4.20% + 4.30% + 4.50%) = $422.00, and the average annual interest is $1,369.29 ÷ 5 = $273.86.

The worked example, line by line

Setup: deposit $10,000, 5 rungs, rates 4.00%, 4.10%, 4.20%, 4.30%, 4.50%.

Line 1 — the rung amount. $10,000 ÷ 5 = $2,000 a rung.

Line 2 — rung 1. $2,000 × 1.04¹ = $2,080.00, interest $80.00.

Line 3 — rung 2. $2,000 × 1.041² = $2,000 × 1.083681 = $2,167.36, interest $167.36.

Line 4 — rung 3. $2,000 × 1.042³ = $2,000 × 1.131366 = $2,262.73, interest $262.73.

Line 5 — rung 4. $2,000 × 1.043⁴ = $2,000 × 1.183416 = $2,366.83, interest $366.83.

Line 6 — rung 5. $2,000 × 1.045⁵ = $2,000 × 1.246181 = $2,492.36, interest $492.36.

Line 7 — the total. $2,080.00 + $2,167.36 + $2,262.73 + $2,366.83 + $2,492.36 = $11,369.29 of maturity, and the interest is $1,369.29.

Line 8 — the first year. $2,000 × (4.00% + 4.10% + 4.20% + 4.30% + 4.50%) = $2,000 × 21.10% = $422.00 of interest in the first year.

Every branch, checked

$25,000 deposit: each rung is $5,000, the total maturity is $28,423.22 and the interest is $3,423.22. The interest scales with the deposit, because every rung is the same multiple of the $10,000 ladder.

3 rungs: each rung is $3,333.33, the maturities are $3,466.67, $3,612.27 and $3,771.22, the total is $10,850.16 and the interest is $850.16. Fewer rungs means less money in the long terms, so the interest drops by $519.13 against the 5-rung ladder.

All rates 5%: the maturities are $2,100.00, $2,205.00, $2,315.25, $2,431.01 and $2,552.56, the total is $11,603.83 and the interest is $1,603.83. A flat 5% earns $234.54 more than the rising rates, because the short rungs earn 5% instead of 4.00% to 4.30%.

Reverse — the deposit for a target interest: a deposit of $14,606.12 earns $2,000 of total interest, and a deposit of $11,848.34 earns $500 in the first year. Start from the interest you want, not the deposit you have.

What the defaults assume

The model assumes annual compounding, one rate per rung, and the rates fixed for the whole term of each rung. It assumes the deposit splits evenly across the rungs, and it assumes the interest is left in the CD until maturity, not paid out. It leaves out the early-withdrawal penalty, which most banks charge if a rung is broken before maturity, and it leaves out taxes: CD interest is taxed as ordinary income in the year it is earned, so the after-tax interest is lower. It also leaves out the renewal choice: when a rung matures, the money can be spent, reinvested in a new 5-year rung, or moved elsewhere. Rounding convention: money is rounded to cents, and all figures are computed from unrounded values, rounded only for display — so the totals can run a cent or two above a sum of the rounded rung figures.

Output · formula · meaning

Who uses this

• The saver with $10,000 to set aside: they learn the ladder earns $1,369.29 of interest and matures at $11,369.29 — so they know what the five years pay, and they check the $422.00 of first-year interest against the $400.00 from a single 1-year CD.
• The saver who wants yearly access: they learn rung 1 matures at $2,080.00 after one year — so they know $2,000 frees up every year, and they check the $2,492.36 from the 5-year rung against the $2,461.82 from putting it all in one 5-year CD.
• The saver comparing rungs: they learn 3 rungs earn $850.16 against $1,369.29 for 5 rungs — so they know fewer rungs means less interest, and they check the $1,603.83 at a flat 5% before they pick a bank.
• The saver with a target in mind: they learn a deposit of $14,606.12 earns $2,000 of total interest — so they know the deposit the goal needs, and they check the $11,848.34 for $500 in the first year before they commit.

Accuracy & limitations

The math is exact for the numbers you enter: each rung matures at the rung amount times one plus its rate to the power of its term, the total is the sum of the rung maturities, and the first-year interest is the sum of each rung amount times its rate. What the model cannot do is read your bank’s rates for you: check the actual rates, because 4.00% and 5.00% give very different totals, and check the compounding — this calculator compounds once a year, while some CDs compound monthly or daily. It assumes the rates stay fixed for the whole term, the deposit splits evenly, and the interest is left in until maturity, and it leaves out the early-withdrawal penalty and taxes on the interest. For a CD against a savings account, see CD vs savings account; for a CD against a money market, see CD vs money market.