Laddering is an investment strategy that calls for establishing a pattern of rolling maturity dates for a portfolio of fixed-income investments, such as intermediate-term bonds or certificates of deposit (CDs). For example, instead of buying one Rs.15,000 CD with a three-year term, you buy three Rs.5,000 CDs maturing one year apart. As each CD comes due, you can reinvest the principal to extend the pattern, use the money for a preplanned purchase, or have it available to take advantage of a new investment opportunity or cover unexpected expenses. And if you ladder, you can avoid having to liquidate a large bond investment if you need just some of the money or reinvest your entire principal at a time when interest rates may be low.
A method of staggering the purchase of certificates or bonds whereby, when the investment matures, the funds can be reinvested in short or long-term investments depending on the current interest rate.