E*Trade added a few tools to its bond resource center, the most useful of which seems to be its bond laddering tool. It makes it easy to ladder bonds by just clicking three drop-down boxes, “Start in,” “end in,” and “mature every.” What’s laddering you ask?
When you ladder an investment, like bonds or CDs, you purchase several units of the financial product, each with consecutive maturity days. So you might get 3 bonds, one which matures in 1 year, one in 2 years, and one in 3 years. This way you’re guaranteed a reliable source of income. Or you could reinvest each one at 3 years as it comes due, so that you know you’ll have access to cash on certain dates but still be growing your nest egg.
Personally I don’t like E*Trade because it feels like the site is designed to look like a video game and thus encourage you to make more transactions than you might otherwise, but to each his own.
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