Building a deposit ladder: a fixed rate without locking away all your money

25 Sep 2026 · 4 min read · Spaarradar editorial team

With a deposit ladder you spread your savings across deposits with increasing terms. Every year a part comes free, while the rest keeps a higher fixed rate. This is how you set one up, with a worked example.

A fixed-term deposit gives certainty, but forces you into a gamble: if you lock everything away for five years and rates rise, you are stuck with today's low rate. If you lock everything away for just one year and rates fall, you have to start again next year for less. A deposit ladder takes that gamble out.

How a ladder works

You divide your money into equal parts and lock each part away for a different term. With €25,000 and five rungs it looks like this:

After a year the first rung comes free. If you need the money, you have it. If you do not need it, you lock it away again for five years, the longest term of your ladder. After a few years your whole ladder consists of five-year deposits, while a part still comes free every year.

What it gives you

• You spread the interest rate risk. You never lock away all your money at the rate of one moment. If rates rise, the rung that comes free that year benefits. If rates fall, the other rungs keep their old, higher rate.
• You keep access to your money. Not daily, but a fixed part every year. For money you do not need right away, that is often enough.
• You do not have to predict the market. Nobody knows what rates will do in three years. With a ladder you do not need to know either.

What it costs

A ladder is not always the highest return. If long terms pay clearly more than short ones, then locking everything away for a long time earns more on paper. So you pay a small price for flexibility. And sometimes the rate on short terms is actually higher than on long ones. Then a ladder makes less sense and a short term or an instant-access account is the more obvious choice.

You can see how the rates per term stand right now on compare deposit rates: above the list, the best rate per term is shown side by side.

How to set up a ladder

1. Decide on your buffer. Money you may need unexpectedly does not belong in a ladder but in an instant-access account.
2. Choose the number of rungs and the step. Five rungs of one year is the classic form. If you want to be able to get at your money more often, it also works with steps of three or six months.
3. Find the best deposit for each term. That does not have to be at one bank. Often a different bank is the best for each term.
4. Mind the deposit guarantee. If you are dividing a large amount, stay below €100,000 per bank. See saving more than €100,000.
5. Note the end dates. Some banks renew a deposit automatically if you do nothing. Put a reminder in your calendar, a few weeks before each end date.

The deposit ladder tool does steps 2 and 3 for you. You enter your amount, choose the number of rungs and the step, and see the best-paying deposit of this moment for each rung, with the total return.

Good to know

• Minimum deposit. Many deposits have a minimum, often between €500 and €5,000. With a small amount, three rungs are more practical than five.
• Interest payout. With some deposits the interest is paid out yearly, with others only at the end. Our comparison converts both to an effective annual rate, so they stand side by side fairly.
• Withholding tax. On deposits in a few European countries, tax is withheld on the interest. What difference that makes and how to avoid it is explained in withholding tax on foreign savings interest.

Still undecided between locking money away and saving freely? In deposit or savings account we put the two side by side.

Sources

• The rates per term: compare deposit rates
• How the ladder is calculated: the deposit ladder and the methodology

Not advice. Rates are gross and can change; the tables in this article show the position at the moment you open the page. How we calculate and check is described in the methodology.