What a “jumbo CD ladder” is — and why people build them

A jumbo CD is simply a certificate of deposit with a high minimum balance (usually $100 000, sometimes $250 000). A ladder is the strategy of splitting the money into several CDs that mature at regular intervals instead of locking the whole amount into one long-term CD.

Classic 5-rung jumbo ladderAmountTermExample APY*Matures
Rung 1$100 0001 year4.20 %Apr 2026
Rung 2$100 0002 years4.25 %Apr 2027
Rung 3$100 0003 years4.30 %Apr 2028
Rung 4$100 0004 years4.30 %Apr 2029
Rung 5$100 0005 years4.45 %Apr 2030

*Representative credit-union jumbo rates on 26 Apr 2025. The blended, liquidity-weighted yield in year 1 is ~4.30 % and rises each year as higher-rate rungs roll forward.

How the ladder works step-by-step

  1. Day 0:
    Deposit $500 000 across five CDs, one year apart (1-, 2-, 3-, 4-, 5-year terms).
  2. At 12 months (Apr 2026):
    Rung 1 matures.
    • Withdraw the interest if you need it, or
    • Roll the $100 000 principal into a new 5-year jumbo CD at the then-current 5-year rate.
  3. Repeat every year:
    Each April another $100 000 comes due, keeping one-fifth of the capital liquid and locking the rest back into the longest available (typically highest-yielding) rung.

After year 5, every dollar is in a 5-year CD, yet 20 % of the ladder is still maturing every year, so you never wait more than 12 months for access without penalty.

Why build a jumbo ladder?

BenefitWhy it matters
Higher rates from jumbo tiersSome banks/CUs pay 10–50 bp more once you clear $100 k or $250 k.
Blends yield and flexibilityYou capture near-5-year rates on most of the money but still have yearly liquidity.
Reinvestment hedgeIf rates rise, each rollover lets you ratchet yields higher; if they fall, four-fifths of the ladder is still locked at yesterday's better rate.
Penalty risk is smallerNeed funds early? At worst you break a single rung, paying a penalty on 20 % of the portfolio instead of 100 %.

Practical tips

When not to ladder

Bottom line: A jumbo CD ladder is a disciplined way to squeeze out the best long-term jumbo yields and keep annual access to one-fifth of your principal.