Bond Ladder

Definition

• An investment portfolio where a series of bonds have differing maturity dates. Purchasing multiple small bonds with different maturity dates instead of one large bond can lower interest rate risk and increase liquidity. When properly laddered, the maturity dates of the bonds will be evenly spaced over a set period.

Synonyms
hedge your bets, multiple bonds, bond laddering

Related Terms and Acronyms

• Bond — Definition,
  • A certificate of debt issued by a government or corporation guaranteeing payment of the original investment plus interest by a specified future date.
• Laddering — Definition,
  • Staggering deposits into investments such as CDs in order to vary and better the rate of return.