A term deposit ladder spreads your money across several deposits that mature at different times, instead of putting it all in one.
How it works
Say you have $50,000. Rather than one 12-month deposit, you split it into five $10,000 deposits maturing at 3, 6, 9, 12 and 15 months. Each time one matures, you reinvest it into a new longer-term deposit.
Why bother
- Regular access: something matures every few months, so your cash isn't fully locked.
- Higher average rate: longer terms usually pay more, and the ladder keeps part of your money in them.
- Less rate-timing risk: you're never forced to reinvest everything at one moment's rate.
The trade-off
Laddering takes a little admin — you track maturities and reinvest. Many savers automate it by setting each deposit to auto-renew, then adjusting as rates move.