{"id":17137,"date":"2024-05-07T06:43:28","date_gmt":"2024-05-07T13:43:28","guid":{"rendered":"https:\/\/canary.kcprod.info/blog\/?p=17137"},"modified":"2025-06-02T13:14:56","modified_gmt":"2025-06-02T20:14:56","slug":"introducing-automated-bond-ladder","status":"publish","type":"post","link":"https:\/\/canary.kcprod.info/blog\/introducing-automated-bond-ladder\/","title":{"rendered":"Introducing Wealthfront\u2019s Automated Bond Ladder"},"content":{"rendered":"\n

Note: As of June 1, 2025, we have lowered the annual advisory fee for our Automated Bond Ladder to 0.15%. This fee will be waived for the first three months on your first Automated Bond Ladder Account. This post has been updated to reflect this change.<\/em><\/p>\n\n\n\n

Today, we\u2019re thrilled to introduce Wealthfront\u2019s <\/strong>Automated Bond Ladder<\/strong><\/a>, an easy new way to earn a steady yield on your extra cash with zero state income taxes. <\/strong>Wealthfront’s Automated Bond Ladder invests in a portfolio of US Treasuries, which are exempt from state and local income taxes, so you can earn more\u2014and keep more<\/a>\u2014than you would with most savings accounts and some CDs. Whether you\u2019re looking for a way to earn safe interest on extra cash you don\u2019t expect to need right away, protect and grow a windfall, or save for important future expenses, Wealthfront\u2019s Automated Bond Ladder is a powerful tool to help you grow your wealth. And while a bond ladder can be a pain to manage manually (think spreadsheets and calendar reminders), Wealthfront lets you set one up in just a few clicks. <\/p>\n\n\n\n

Take advantage of current yields with no state income taxes<\/h2>\n\n\n\n

Bond ladders are a time-tested investing strategy designed to offer steady yield and manage interest rate risk. A bond ladder is a portfolio of bonds with different maturities, with portions (or \u201crungs\u201d) which mature at regular intervals over time. As each bond matures, you\u2019ll get your principal back, and it can then be reinvested into existing or new rungs. <\/p>\n\n\n\n

Why do this? One, ladders allow you to take advantage of current rates and earn a steady stream of interest. And two, ladders reduce your interest rate risk by offering diversification. Bonds, like stocks, respond to changes in interest rates and market conditions. When you hold a bond ladder with bonds of various maturities, you\u2019re less exposed to interest rate risk than you would be if you owned a single bond. This can translate to more consistent returns. In a recent article comparing bond ladders to other bond strategies, the Wall Street Journal<\/em> wrote<\/a>: \u201cThe verdict: The bond-laddering portfolio provides more-stable returns over various interest-rate environments.\u201d<\/p>\n\n\n\n

Historically, the big drawback of bond ladders (or CD ladders, a similar strategy) has been that they are difficult and time-consuming to set up and manage\u2014bond ladders require time, determination, and often, spreadsheets. Some traditional financial advisors will manage a ladder for you, but often charge a premium to do so. Wealthfront has completely automated the strategy, so we can find you great rates with absolutely none of the hassle for a low 0.15% advisory fee (which, for a limited time, we are waiving for your first three months).1<\/sup>\u00a0<\/p>\n\n\n\n

We\u2019ve built our Automated Bond Ladder with US Treasury bills and notes, which pay interest on a regular schedule and are exempt from state and local income taxes. State income taxes can be substantial: For example, the top marginal rate in California is currently 13.3% and the top marginal rate in New York is currently 10.9%. As a result, you may be able to keep significantly more of the interest you earn after taxes with US Treasuries than you would with the interest from a savings account or CD, depending on your state of residence and tax bracket. To understand how much you personally could benefit from the tax treatment of Treasuries, you can enter your details into our calculator<\/a>. <\/p>\n\n\n\n

US Treasuries are essentially loans investors make to the US government and are backed by the full faith and credit of the US government, which means you are taking on next-to no risk to your principal (unless the US government defaults\u2014which, to date, has never happened) if you hold to maturity. These investments are considered so safe that they are frequently used to represent the risk-free rate of return, or the amount of return you might expect to receive for taking on zero risk. <\/p>\n\n\n\n

To learn more about how we build Automated Bond Ladders, you can check out our white paper<\/a>.<\/p>\n\n\n\n

Getting started with an Automated Bond Ladder<\/h2>\n\n\n\n

To get started with an Automated Bond Ladder<\/a>, visit our website or open our mobile app. Select an Automated Bond Ladder and choose your maximum maturity\u2014anywhere from three months up to six years. Choosing a greater maximum maturity means you effectively lock in your yield for longer (which can be good if you expect interest rates to decrease<\/a>), while a shorter maximum maturity allows you to take on less risk to your principal if you have to sell bonds before their maturity dates. A shorter maximum maturity is also less exposed to interest rate risk. Once you\u2019ve chosen your maximum maturity, we\u2019ll automatically identify which bonds to purchase and then build you a ladder that prioritizes high coupon payments and liquidity. As bonds mature or interest is paid, we\u2019ll purchase new bonds, so that you don’t miss out on earning yield.<\/p>\n\n\n\n

\"Wealthfront<\/figure>\n\n\n\n

You can add more funds to your Automated Bond Ladder at any time, and our software will automatically find and buy more bonds with great rates across your ladder rungs\u2014no spreadsheets required. You can even build multiple bond ladders of different lengths to help you save for different goals. US Treasuries are highly liquid, so if you need to withdraw early, we\u2019ll choose which bonds to sell in order to maintain a balanced ladder and also work to limit your tax exposure. Unlike with a CD, there are no penalties for selling before maturity, although you could lose some of your principal. <\/p>\n\n\n\n

Build long-term wealth on your own terms<\/h2>\n\n\n\n

Wealthfront\u2019s Automated Bond Ladder is a first-of-its-kind product that automates the complex chore of building a bond ladder so you can easily take advantage of current yields and the state tax benefits of US Treasuries. We are delighted to make it available to you for a low annual advisory fee of 0.15%\u2014and we\u2019ll waive that fee for your first three months.1<\/sup>\u00a0<\/p>\n\n\n\n

For maximum liquidity and a high 3.30% APY through our partner banks, we still suggest keeping your short-term savings in the Wealthfront Cash Account<\/a> until you\u2019re ready to invest. For long-term goals at least three to five years in the future, we suggest investing in an diversified portfolio of low-cost index funds like Wealthfront\u2019s Classic portfolio<\/a>, Socially Responsible portfolio<\/a>, or Direct Indexing portfolio<\/a>. And for situations where you want to earn safe interest on cash you don\u2019t need right away, protect and grow a windfall, or save for future important expenses with very little risk to your principal, we\u2019re proud to offer our Automated Bond Ladder. No matter what you\u2019re saving for, Wealthfront has the right accounts to help you meet your goals with confidence. <\/p>\n","protected":false},"excerpt":{"rendered":"

Note: As of June 1, 2025, we have lowered the annual advisory fee for our Automated Bond Ladder to 0.15%. This fee will be waived for the first three months on your first Automated Bond Ladder Account. This post has been updated to reflect this change. Today, we\u2019re thrilled to introduce Wealthfront\u2019s Automated Bond Ladder, […]<\/p>\n","protected":false},"author":1,"featured_media":17154,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1360],"tags":[],"coauthors":[523],"class_list":["post-17137","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-product-news"],"acf":[],"yoast_head":"\nIntroducing Wealthfront\u2019s Automated Bond Ladder | Wealthfront<\/title>\n<meta name=\"description\" content=\"We\u2019ve built an easy new way to earn a steady yield on your extra cash with zero state income taxes.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/canary.kcprod.info/blog\/introducing-automated-bond-ladder\/\" \/>\n<meta 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