MJ,

You don't have a 5-year CD ladder. You have a ladder of CDs of different maturities, which you may then be planning to roll over into 5-year CDs as the shorter maturities come due. It is unlikely that, during the building period, your total return will match putting the lump sum into a 5-year CD at the beginning, even if interest rates go up.

The easiest way to create a fixed-income ladder in by allocating new money into the best paying option available—5-year CDs, 5-year T-bills, EE-bonds. I've been buying 5-year CDs, because they are paying better than 5-year T-bills, even 10-year T-bills. Every time an older 5-year CD comes due, I roll it over into a new 5-year CD (gritting my teeth).

If you are starting with a lump sum of money, not dripping new money in, you have to break up the lump sum into CDs with shorter maturities, gradually building into a ladder of 5-year CDs over the first 5-years. Eventually, you will be able to get the average yields on 5-year CDs, but during the building period, you probably will lose out. The problem with CDs, however, is liquidity, and having some huge CD coming due every 5-years and nothing in the interim can be a liquidity problem. So, sometimes it is necessary to eat the lower returns while you create a ladder of 5-year CDs to solve the long term liquidity problem.