With Treasury yields at 4-5%, government bonds are offering the best risk-free returns in 15 years. A bond ladder provides predictable income while protecting against rate changes.
How to Build a Treasury Ladder
- Buy bonds maturing at intervals: 3-month, 6-month, 1-year, 2-year
- When each matures, reinvest at the longest rung
- Current yields: 3-month 5.0%, 1-year 4.7%, 2-year 4.3%, 10-year 4.1%
- Buy directly at TreasuryDirect.gov (no fees)
A $100,000 bond ladder across 4 maturities generates approximately $4,500/year in risk-free income. Treasuries are state-tax-exempt, adding 0.3-0.5% effective yield advantage over savings accounts.
