Bond Ladder Builder
Split a lump sum across staggered maturities and see what matures when: allocation per rung, projected maturity values, weighted average maturity, and a downloadable schedule.
Ladder design
Your ladder
| Weighted average maturity | — |
| Total invested | — |
| Total projected interest | — |
| Rung | Matures | Invest now | Maturity value |
|---|
Projections assume each rung compounds semi-annually at the assumed yield to its maturity. Actual instrument yields vary by tenor, so use current G-sec/SDL/NCD yields for each rung when you implement.
Building the ladder for real
- Pick the horizon. A retiree wanting yearly income for 5 years → 5 rungs, 1 year apart. Saving for fees due in 2–6 years → first maturity at 2 years.
- Choose instruments per rung. Sovereign-only keeps it simple: T-bills for the shortest rung, G-secs/SDLs beyond. Check current auction yields on RBI Retail Direct.
- Buy maturities, not funds. The point of a ladder is a hard maturity date returning face value. Target-maturity debt funds are a reasonable proxy, but they don't pin the exact cash date.
- Roll or spend. When a rung matures, either spend it (income mode) or reinvest at the long end (perpetual mode). Rolling averages you across rate cycles without any timing decisions.
The reinvestment-risk math
Put ₹10 lakh in a single 1-year instrument and 100% of your corpus reprices at whatever rates are next year. In a 5-rung ladder, only about 20% reprices each year, so a rate crash hurts one rung instead of the portfolio. The cost is that middle rungs earn middling yields rather than the longest rate. You're buying insurance with basis points. The full ladder guide works through a retiree example with real numbers.
Frequently asked questions
What is a bond ladder?
You split your corpus across bonds maturing in successive years (the 'rungs'). Each year one rung matures, handing you cash to spend or reinvest at then-current rates. It smooths reinvestment risk, gives predictable liquidity, and removes the need to forecast interest rates.
What should I put on each rung in India?
Common choices: T-bills or short G-secs for rungs under 1–2 years, G-secs/SDLs for middle rungs, and AAA/AA corporate bonds on longer rungs if you'll accept credit risk for extra yield. RBI Retail Direct covers the sovereign options with no charges.
Ladder vs a single long bond: which is better?
A single long bond maximises yield if rates fall but exposes your whole corpus to one reinvestment date and full duration risk. A ladder deliberately trades some yield for lower risk and annual liquidity. Retirees and goal-based savers usually prefer the ladder.
How is this different from an FD ladder?
Mechanically identical. The difference is the instruments. G-sec ladders beat FD ladders on sovereign safety and often on yield at longer tenors, while FDs win on simplicity and premature-exit flexibility. Many investors ladder both.
Related tools & guides
Educational tool, last reviewed July 2026. Results are estimates based on your inputs and standard market conventions; actual traded prices, taxes and platform charges may differ. Not investment advice; see the disclaimer.