FD laddering strategy!

Investing in FDs using a laddering strategy can address your liquidity needs and also protect from reinvestment risk. For example, if you have Rs 5 lakh to invest in fixed deposits, make five fixed deposits maturing over one, three and five years, provided your financial goals permit. If you keep doing this at regular intervals, you will have fixed deposits maturing at regular intervals providing liquidity. If in case you need money in the short-term, then you can opt for pre-mature withdrawal only to the extent of the money required, provided you have staggered your investments with the laddering strategy.