what is a bond ladder 
a bond ladder is a portfolio of fixed income securities in which each security has a significantly different maturity date the purpose of purchasing several smaller bonds with varying dates of maturity rather than one large bond with a single maturity date is to minimize interest rate risk increase liquidity and diversify credit risk understanding bond ladderin a bond ladder the bonds maturity dates are evenly spaced across several months or several years so that the proceeds are reinvested at regular intervals as the bonds mature the more liquidity an investor needs the closer together their bond maturities should be benefits of a bond ladderinvestors who purchase bonds usually buy them as a conservative way to produce income however investors looking for a higher yield without reducing the credit quality usually need to purchase a bond with a longer maturity doing so exposes the investor to three types of risk interest rate risk credit risk and liquidity risk 