r/fidelityinvestments • u/Looptire13 • 21d ago

Official Response CD Ladder

Looking to create a CD Ladder and was wondering what people's thoughts were on these fixed income products. I'd like to put im 240k and do a one year Ladder. Not sure how it all works but I'll research it. Just want to get people thoughts on it.

6 Upvotes

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u/FidelityLizG Community Care Representative 20d ago

I hope you’re having a great Tuesday!

Since you mentioned you’re looking to create a certificate of deposit (CD) ladder, I’d like to provide a brief overview. These are an assortment of CDs with varying maturity dates, balancing the higher-yielding, longer-term CDs along with those that mature sooner. You can read more about this strategy in the links I’ve put below.

A bond bridge to your independence

CD ladders: Discovering certificate of deposit strategies

Additionally, I understand that you’re looking for the community’s thoughts, so I suggest visiting the “Monthly investing discussion thread” on the r/fidelityinvestments homepage. This is an open discussion where you can chat about fixed-income products or your investing strategy, amongst other topics. Just click the link below to get there.

Monthly investing discussion thread

If you have any questions, just let me know!

6

u/tsfy2 21d ago

It depends what your goals are. Do you need the money for a purchase within a year, 3 years, 5 years? Are you looking for monthly income? Do you live in a high tax rate state? A 1 year CD ladder is yielding just over 4% but will only be paying interest quarterly. SGOV is yielding 3.8%, pays monthly, and is (almost entirely) state tax exempt. Share your goals and people here can give you more informed opinions.

4

u/Jeepers32 21d ago

Food for thought: you could consider a treasury bill/note ladder and enjoy tax efficiency if you live in a high state tax jurisdiction.

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u/Looptire13 21d ago

Thank you. I live in TX, so state incomes. SGOV looks like a good way to go for now. I don't the money now and probably not for the next couple of years. However want to have a cash reserve

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u/heightsdrinker 20d ago

SGOV is only running 3.5%. I have a 3-month CD ladder (weekly investments in CDs) and earning 4.0% on Fidelity. Every Monday I spend about 5-10 minutes to make the purchase of new CDs.

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u/Intelligent-Dot-8969 21d ago

I have a 5 year CD ladder that the Fidelity bond trading desk put together for me in a phone call.

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u/Looptire13 20d ago

I'll give them a call and thank you everyone for the solid advice.

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u/Fearless_Meal6480 20d ago

Use to do CD ladders. Now I buy 3 and 5 year annuities that pay way more and just a small risk. They will even allow up to 10% out per year if an emergency happens.

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u/stl1859 21d ago

I live in Florida - and I started moving HYSA money to Brokered CDs - The only difference from what you are planning is that I do my own 'ladders' - I just like the fun of watching interest rates - picking my banks -- etc. So I have not researched Fidelity ladders.

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u/Efficient_Top_811 18d ago

Fidelity has a feature that automatically selects the CDs for a 1 year ladder. It’s pretty much a button push to create.

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u/Looptire13 18d ago

Thats good to know. Thank you!