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How do I… ladder term deposits

Ladder term deposits: a guide to climbing to financial success

In our shifting financial landscape, it’s more important than ever to seek reliable opportunities for long-term, steady wealth-building. If you can relate, you might want to consider ladder term deposits. This savings strategy is gaining in popularity for people looking to manage risk while maintaining access to funds, and for good reason. Here we’ll break down this strategy and leave you with some tips for making the most of it and avoiding common pitfalls.

Reviewing the basics: term deposits

Before we dive into ladder term deposits, let's review the basics of term deposits. A term deposit, also known as a certificate of deposit (CD) or Guaranteed Income Certificate (GIC), is a type of savings account that pays a fixed interest rate for a fixed period of time. 

Accessing the funds you place in a term deposit before the account matures can be difficult and may involve penalties and fees, so try not to put all your eggs in one proverbial basket.

What are ladder term deposits?

A ladder term deposit is a savings strategy that involves placing funds in multiple term deposits over time with staggered maturity dates. For example, if you have $5,000 to invest, you may choose to place $1,000 in a one-year term deposit, $2,000 in a two-year term deposit, and $2,000 in a three-year term deposit.

Once the first account matures, you have two options: take the money out or reset your term deposit with a new term and rate. The beauty of the laddering strategy is that you can access the maturing portion of your cash after that first year if you need it. This gives you the most flexibility when accessing or reinvesting your money. You benefit from both easy access to funds when you need them, and you can maximize returns by keeping an eye on interest rates.

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Gulf & Fraser offers four main types of term deposits

Non-redeemable term deposits

These are the most common type of term deposits with a fixed term length. This is an ideal investment choice with predictable returns as long as you don’t need your funds before the term ends.

Redeemable and cashable term deposits

Redeemable and cashable term deposits let you withdraw your investment before the maturity date, but withdrawing your funds may come with penalties or reduced interest rates. This option is suitable if you anticipate needing early access to your funds while still earning a reasonable return.

Convertible term deposits

Convertible term deposits can be reinvested into a new term deposit of an equal or longer term on the anniversary date. If you choose to reinvest your term deposit, then the funds can't be cashed out of withdrawn until the end of the new term length. 

MarketWise™ term deposits

Gulf & Fraser’s MarketWiseTM term deposit is a market-linked term that is ideal for those seeking higher potential returns than traditional term deposits, without risking your principal investment. However, this option starts with a minimum $1,000 deposit.

Key benefits of ladder term deposits


By staggering the maturity dates of your term deposits, you can set up a savings strategy that provides regular access to your funds while still giving you the benefits of a term deposit.


Spreading your money across multiple term deposits with different maturity dates reduces your risk and takes advantage of rate changes when each of your funds hits maturity on a staggered schedule.

Higher interest rates

In an interest rate environment where rates are rising, you can ladder your term deposits to ensure that you are earning the highest possible rate on your savings.

Tips to maximize benefits

  • Customize your ladder: Customize your ladder term deposits with different term lengths to make sure you feel comfortable with your access to funds and the rates you are earning.

  • Plan ahead: Plan ahead and stagger your term deposits so that you have regular access to your funds around upcoming milestones.

  • Keep an eye on interest rates: Take advantage of rate changes when each of your funds hits maturity on your staggered schedule.

Pros & cons

No financial tool is perfect. It all depends on your short-term and long-term financial goals. As outlined above, there are many benefits to ladder term deposits like:    

As with any strategy, it all comes down to execution. The way you choose to layer your term deposits must be customized to your needs, or you may encounter the two main drawbacks of this savings strategy:     

  • Limited access to funds before maturity

  • Interest rates may change and are hard to predict

Ladder term deposits can be a great way to make your money work harder for you. But keep in mind that accessing the funds you place in a term deposit before the account matures can be tricky and result in extra fees. If you time your accounts right though, you can set a savings strategy that provides regular access to your money while still giving you significant savings benefits.

Interested in further exploring term deposits?

Learn more about term deposits and which products Gulf & Fraser offers. Our team will be happy to get you started with confidence.

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