Laddering is a relatively simple concept where investors purchase GICs with differing maturing dates and thus different rates of return.

If you have $100,000 to invest, divide the investment into equal amounts of $20,000. Invest $20,000 for 1yr, $20,000 for 2 yrs, $20,000 for 3yrs,$20,000 for 4yrs and $20,000 for 5yrs.

Any maturing GICs would be invested for 5yrs.

Advantages are:

• Diversification.
• Liquidity.
• Eliminates guess work.
• Security.
• Better control of cash flow.
• Increased returns.