@Shaun: See my above comment.

@Casey: Good point and good luck with your laddering.

@Evan: What do you think of those WaMu returns these days? Not to be snarky, but you got paid that premium for a reason.

@Kimberly: We discussed this via e-mail, but for everyone else: I read this as one of two options you could do with the interest. 1.) interest is kept in the CD and continues to compound. 2.) interest is paid out to you and stuck into one of your current ING accounts. I stuck with option 1, to get the most compounding.

@Karla: It’s good to know yourself that well. I think that is the system we may end up with — efund in CDs and the rest in savings.

The other “bucket” is in an ING savings account. That is my “insurance deductible”, “the oven blew up” etc part. Right now, this is about 1/4 of the efund, but I’m working on building it back up to half.

In both cases, the fact that there is a bit of distance between that money and my checking account is a good thing. I tend to spend if I have instant access. That’s just something that I know about myself, and one reason that I keep a small checking account that is just for my ‘blow’ money – it’s funded by my overtime and is totally guilt free spending. And that little account lets me stay self disciplined and on plan with the much bigger household checking and all my savings and investment accounts.

There are some things I don’t agree with Dave Ramsey on, but one I do is that Personal Finanace has a HUGE component of “personal” – what works for one person may or may not work for others. That’s what makes the PF blogsphere so much fun!

Take a look:
http://www.myjourneytomillions.com/articles/are-certificate-of-deposits-cds-worth-it

I personally like using CDs because any small increase in return is still more free money. I also find it’s easier for me to have it set away and not think about and be tempted by the money. They roll over on their own so the money is never close enough to spend. Good for me since I tend to take anything that isn’t nailed down and throw it at our debt.

My emergency fun stays liquid, but CD’s would be appropriate for longer term saving goals where the money will not be needed with little notice.

CD laddering is a good idea for when you lose your job and still need an income to pay the monthly bills until you find a new job. Ideally in this instance you would have one month’s worth of bills maturing at the beginning of each month.

The trouble with CD laddering arises when you need to dip into your emergency fund for a major purchase. Like when a large appliance breaks down or you have a rather large medical bill. If the value of the CD that’s maturing isn’t enough to cover this emergency you have to take a penalty by withdrawing from the CD.

I suppose it really depends on how large a value you have maturing every month and the deductible on your health insurance.

I intend on CD laddering once I have an emergency fund.