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Article posted on Feb 17

Velociraptor Aerospace Dynamics

• Posted by Ryan Finnie on February 17, 2011, 12:26 pm

After yesterday's post, I went back to my finances, talked with some friends, and did some research on the implications of running a business. And I determined that it does make a lot of sense to manage my various online ventures as a full-fledged (sole proprietor) business. So yay, I've made the leap from accidental business owner to willing business owner.

As of today, Velociraptor Aerospace Dynamics is open for business. I've got a good enough paper trail of income and expenses to go back to January 1, so technically nothing has changed except for the DBA name (which is basically optional for a sole proprietorship). VAD now has a P.O. Box, a ledger, and a Nevada business license. (Getting a Nevada business license is actually easier than signing up for Facebook. No, I'm serious.)

It also has a web site, created by our team of raptor engineers who traveled back to 1995 to design it.

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Article posted on Feb 16

Ryan Finnie, business owner

• Posted by Ryan Finnie on February 16, 2011, 7:39 pm

Last year, I accidentally became a small business owner. I just found that out this week.

I have a Google AdSense account that brings in a little money. I used to have ads on finnie.org, but removed them after finding out how much money they earned. That is to say, nothing. I also have a single ad on finnix.org, but that doesn't bring in much either. By far, the most ad revenue comes from The American Society for Velociraptor Attack Prevention, a semi-official parody site of the running raptor jokes on Xkcd. It was originally one of my one-year single-use parody sites (a .info domain was registered mainly because my registrar was having a $2 sale on them at the time), but Randall Munroe convinced me to keep the site around. Later ads were added.

In the last few years, the Google checks added up to $200 per year or so. I'd lump it in with employment and interest income and pay taxes on it like normal (using a 1040EZ). But this year, I completely forgot about the Google income when filing taxes, which were done late last month. I received my $9 refund (no, seriously), and moved on. But this week, I received a 1099-MISC form from Google. Last year, I made nearly $800 from ads. Whoah.

While searching for info on how to file an amended return, the other shoe dropped. If you make more than $600 per year from sources such as Google AdSense, the IRS considers you to be a small, self-employed business (and Google DOES report your income to the IRS, so simply ignoring this wouldn't have worked). That means paying taxes on the income (which I was doing anyway), filling out business net profit forms (Schedule C), and paying self-employment taxes (Schedule SE). It also means you have to fill out a full 1040; a 1040EZ will not do. Add to this the fact that, since I already submitted my return, I'd have to do an amended return.

I considered finding a tax specialist to figure this out for me, but after spending an evening reading through docs on the IRS site (don't I know how to spend a night), it's actually not that hard. Once you get through the accountant-ese, it's rather simple. First, I basically have to start over, and fill out a 1040 as if it were a normal return. Since I am now a small business owner (apparently), I would need to fill out Schedule C-EZ, which lists my business's revenues and expenses (more on that later), and figures my business's net profit. Also needed is Short Schedule SE, which figures the self-employment tax to pay based on my net profit. Schedule M is the worksheet for the $400 Making Work Pay stimulus, pretty simple. Once those are done, it's just a matter of filling out a Form 1040X, which compares your original return to your amended return.

Now, the nice part about this newly-found self-employment is that the IRS taxes you on net profit, not revenue. What that means is I can individually deduct operating costs related to the revenue. In this case, I deducted hosting costs directly related to the site, as well as the yearly domain renewal cost. In all, my net profit was about $500. And the best part is this is considered separate from personal deductions, so I could continue to take a standard deduction on the personal side, while itemizing those hosting/domain costs on the business side.

When all the number crunching was done, my amended return resulted in a $193 debt to the IRS. My original return resulted in a $9 refund, so the difference means I'll be sending a check for $202. I don't have the exact numbers of how much I would have owed if I simply included that $800 income as employment income, but it actually turns out I paid less on taxes by accidentally becoming a business owner, due to the deductions.

If I have to be a business owner, I may as well get business cards, right? How does Velociraptor Aerospace Dynamics sound?

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Article posted on Oct 16

Mission accomplished

• Posted by Ryan Finnie on October 16, 2009, 12:21 am

In 2000, I got my first credit card, a Capital One card with a $300 limit. Ever since then I have been in credit card debt. 2½ years ago, I was $15,000 in credit card debt and had virtually no savings. 1 year ago, I wasn't doing much better. This year, for a new years resolution, I vowed to get out of credit card debt.

Today, I made a final $914.34 payment, and with that, I have eliminated nearly a decade of credit card debt.

I did it.

Even better, in the process I have managed to grow my savings from almost nothing to nearly $5,000. And now that I have no credit card debt, I can grow that savings even faster.

How did I do it? There is a wealth of information available available on the web for getting out of debt. Here's a few of the methods I used to help with my goals.

1. Figure out where you are now. I had been using Quicken off and on for years. The problem would be when I wouldn't update it for a few days. Days would turn into weeks, weeks into months, and before long I just wouldn't know where I was at financially. At that point I would pretty much stick my head in the sand. Because I didn't know how much money I had on hand, I would start putting various purchases on a credit card. It was a nasty cycle.

   Like an alcoholic needs to admit he has a problem before he can turn his life around, a debtor needs to know how badly he is in debt before he can reverse this debt.

2. Track everything. Get Quicken, or some other financial software. Enter all of your accounts, and enter as much history as you can. Get as many accounts set up for online download as you can. Enter daily expenses daily. Set up recurring payment reminders. All of them. Even the ones you may be embarrassed to yourself about. You can (and will) start changing your spending habits later. The important thing right now is to know where you are now. If you miss a couple days, do not give up.

3. Make goals that fit your current situation. Now that you know where you are, you can start to do something about it. Even if you can only pay $50 toward your debt, you'll at least know you're putting $50 toward your debt. Figure out how long it will take to pay off your debt at that rate. In my case, I was already putting $720 per month toward credit card debt. (The meaning of that number is long since lost, but at least it's a number). That sounds like a lot (and is!), but because I had such bad financial practices, a lot of that was going right back on the cards in the form of new debt. I wouldn't actually recommend making a budget at this point, just make goals and tailor each action you make toward those goals.

4. Do not give up. Yes, I've said it twice already, but it really needs to be reinforced. Do not fear your finances. Do not stick you head in the sand. Be obsessive. It seems one of my hobbies these days is playing with various reports in Quicken, and that "hobby" has really helped me toward my goal.

5. Build up savings. You're not going to like hearing this, but you'll need an emergency fund on top of paying off debt. In fact, it's better to have debt and savings than no debt but no savings, especially in these times. How much really depends on your situation. Make sure a minimum fixed portion of your income goes to savings. Any savings you find beyond that is simply a bonus.

   Also remember, a lot of these tips will actually deal more with savings and less with reducing debt, but most of them can be suited for either. Do you take that $20 per month you saved from lowering your insurance payment and apply it to reducing debt, or increasing savings? It will really depend on your individual situation.

6. Make your savings less accessible. A big problem with holding on to savings was my primary savings account was at the same bank as my checking account. Whenever I would slip into a situation where I did not know the status of my finances, I would do two things: start using credit cards, and dip into savings. The temptation is far too great when the word "savings" is right next to the word "checking" on that ATM menu.

   Today, there are plenty of Internet banks to put your money in. Many include no fees, and nearly all charge nothing to get your money to them. I recommend Ally Bank and Capital One Bank through experience, and ING Direct through reputation. They offer accounts with no fees, allow for automated pull transfers from my (Wells Fargo) checking account, and offer decent interest rates. Capital One offers an ATM card as part of its money market savings account, but I did not accept it. See, when it takes 3 days to transfer funds back from these banks to your checking account, you are much less likely to even consider it.

   I still keep a couple hundred dollars in my Wells Fargo savings account for potential short term emergencies. It's just enough to cover things for a few days in case I needed to transfer funds from Ally or Capital One for larger emergencies. And of course since I now know the status of my finances at all times, I don't dip into those short term emergency funds.

   Also, keep in mind that Regulation D places a limit of six withdrawals per month on online transfers, so be careful when transferring from a savings account to a savings account. Checking to savings is unlimited, which is why I prefer having my entire paycheck direct deposited into my checking account, then using automated transfers to go to their final destinations.

7. Build a safety net into your checking account. I went into this in more detail in a previous blog post, but reduce the perceived balance of your checking account by a few hundred dollars. This will make it less likely that you will need to dig into savings, go to a credit card, or, worst of worst, go to a payday loan place due to irregularities from month to month. Once you do this, tell your bank to cancel overdraft protection on your account if they offer an opt-out, as this service can often do more harm than good.

8. Reduce expenses. Cancel your cable and apply it to your debt/savings. Cancel that MMO you never play any more. Stop going to Starbucks. There is usually plenty of low-hanging fruit to pick from. Each time you receive a lump sum (say, a gift or a rebate), deposit it in savings. When you save recurring monthly costs through reducing expenses, set up automatic transfers to your savings. Most brick-and-mortar banks allow an unlimited number of transfers out of checking, and most Internet banks allow an unlimited number of transfers into savings, so it works well.

   In my case, I have a monthly $40 "Savings (Rent)" transfer from the money I saved when I re-signed my apartment lease, a bi-monthly $22 "Savings (Stim)" from the stimulus tax cut earlier this year, and so on. The trick is to have the transfers begin the same day your paycheck is deposited, so you never consider spending that money.

9. Increase income. If you are a waged employee and can work extra hours, do so. Ask for a raise. Take a second job or leave for a job with a higher salary. Do some side work. Of course, the current economy makes many of these things difficult, but remember, this isn't a list of instructions, just possible avenues you can explore. And remember, maintain a balance in life. Don't work 80 hours per week if it'll make you miserable, even if it will pay your debt off faster.

10. Adjust your federal tax withholdings. For the longest time, I was claiming 0 on my W-4, and I imagine many people are the same, claiming 0 or 1. Essentially, I was having a large extra amount taken out of each paycheck, and was getting it back in one lump sum in April. If, like me, you are a single taxpayer without much complication in your tax setup (standard deduction, etc), you can switch your withholding from 0 to 2. You will get back more with each paycheck, and will only owe or get back less than $20 come April 15.

    Now, it should come as no surprise that my next suggestion is to figure out how much extra you are getting back per paycheck, and set up an automatic transfer of that money into your savings. Remember, with a higher withholding (lower number), you are giving an interest-free loan to Uncle Sam. If you decrease your withholding (increased number) and faithfully transfer that to savings, you can start earning interest on it. Today's interest rates may be lousy, but 1.5% is still better than what you were earning before.

11. Sweep your savings. So now you should have a primary savings account with a small immediate emergency fund, and an Internet bank with more of your savings. Your local account, sadly, most likely has a horribly low interest rate. (As of this writing, my Wells Fargo savings account earns 0.06% APY. Sigh.) But you are regularly depositing savings into it. At this point, you should start sweeping it into the less accessible and higher-earning Internet bank account when you hit a certain balance.

    Personally, I always want to have at least $300 in my primary savings account, but when it hits $500, I sweep the difference into an Internet bank. Again, remember that Regulation D limits this to six online withdrawals per month, so I would only check up on this monthly.

12. Sell some stuff. Go around the house and look for things you don't need. Put them on Craigslist. Make some extra cash. Again, don't sell off your happiness, but do re-evaluate what does make you happy.

13. Don't buy new stuff. It's as simple as that. You see that new TV over there? That 40" LCD? Don't buy that. Many people have expensive hobbies, myself included, and while everybody likes to be entertained, it is important to curb impulses.

14. Consolidate your debt. Go to your bank and ask about a secured or unsecured loan. This is the best option for consolidating your debt. If your car is paid off, that can be used as base collateral, but you may even be able to get an unsecured consolidation loan if you have good credit.

    If this does not work, think about balance transfers between cards, but be VERY careful. Many balance transfers include up-front fees and promotional rates. A 0% APR for 1 year is useless if you cannot guarantee yourself that you will pay it off in that time. The reason is that if you go 1 year + 1 day without paying it off, the card company will often backdate interest for the entire amount, at a high rate. $0 in interest could turn into $500 in interest quite literally overnight. But if, for example, you could get a 5.99% APR transfer for the lifetime of the balance with, say, a 1% transfer fee, I would consider that good enough to transfer all balances into one account. There is a science to this, but unfortunately I have yet to find a good balance transfer calculator that can take multiple cards with multiple existing APRs and convert them into a single balance with a single APR and a transfer fee, and compare that to simply not transferring balances. EDIT (January 2011): I finally sat down and wrote a tool to do exactly this.

    So a lot of this will be gut instinct, unless you sit down and do a lot of math. If you do consolidate debt into a single credit card, it is important that you NEVER use it for purchases after that point. Credit card companies will apply payments to your lowest interest balances first, and even a single purchase on that card can accrue astronomical interest because it won't be paid off until the end.

15. Stop using your credit cards. I hate to admit, but this is one point where I did not follow my own advice. I had all of my credit card debt on one card, but I also used another card for online purchases and recurring payments like my cellphone bill. This card, an American Express "Clear" card, earns 1% cash back (in the form of a gift card), but I made sure that I paid off the balance monthly. Multiple times per month, usually. That is the important distinction: I never actually added new credit card debt this year, though I did continue using a card. However, this requires huge discipline, which some people cannot handle. But it all comes back to keeping your finances organized. Once you know exactly where your finances are, that discipline comes easy.

16. Cancel your credit cards. This is a tricky one. If you have 20 credit cards and can consolidate them, by all means, do so and cancel many of them. Cancel all that you can if you cannot avoid the temptation of new credit card debt. If you can't consolidate, pay off one at a time, and cancel each one after it is paid off. Of course, your credit score will take a dip because of this, but you'll be better off in the long run. I would recommend holding on to your first credit card, if that is your oldest source of credit, though. The reason is if you cancel that, your credit score will take a massive dive. Length of credit history is one of the major factors in determining your credit worthiness.

    Personally, I had four major credit cards. I cancelled one, leaving me with the Amex for rewards (that, again, is used and paid off monthly), a Chase card (that had the debt), and a Capital One card, which was my first piece of credit history. I occasionally put purchases on it and immediately paid them off (most often because some places don't take Amex) to keep the account from going into disuse.

17. Monitor your credit report. While technically not required to pay off debt, you still should always be aware of what is on your credit reports. Go to annualcreditreport.com, which lets you get a free yearly credit report from each of the three credit agencies. The only gotcha here is they will try to upsell you, but the credit reports themselves are free. In addition, I'd recommend Equifax, which has a range of credit subscription services, and usually has sales (for example, buy 3 get 1 free credit reports + score, which is good for checking quarterly).

    I also recommend Credit Karma. It's a free service that lets you pull your score that they calculate based on your credit report, as often as you like. The upside is it's free, but the downside is you just get a score; you can't actually see the credit report they pull. Still, it's useful data.

18. Read, constantly. There are a lot of good personal finance sites out there. My favorites are Get Rich Slowly and Consumerism Commentary. Both feature an amazing amount of personal finance tips and information.

    One thing I will recommend you not do is buy personal finance books. I've read a few, and I'm not a fan. It seems like they all take a few core concepts (most of which I've already introduced here) and spread them out to fill a minimum page count. Those two sites I mentioned above have given me more information than I have through finance books.

    If you still would rather go the book route, I would recommend your local library, not your local bookstore.

19. And above all else, don't listen to a word I say. Or more accurately, don't treat my words as golden. There are many, many views on finance out there, and almost all of them conflict with each other. Some would call me crazy for not advocating starting out with a budget, for example. These tips worked for me, and I hope they work for you, but you must weigh the options and figure out your best plan for eliminating debt.

    Be wary of anybody who has a "system" for getting out of debt. I read a book that, presumably with a straight face, said, "This book is all you need. Follow it and you will get out of debt." I immediately put down the book. I'm sure it had some useful information, but that passage was the equivalent of a used car salesman. The only sure fire solution to debt is education. Learn as much as you can from as many sources as you can.

20. One more thing... Celebrate! When you reach your goal, throw a party. Tell everyone you know. Make a copy of your final check and frame it. This is definitely one of the best days of my life. I had been in credit card debt for nearly a decade, and this is a massive weight off my shoulders. The best part was opening Quicken this morning and seeing "$0.00" next to each credit card balance, where there used to be red numbers.

Note that I kept saying "credit card debt". I still have a $16,000 car loan, but now that I am out of credit card debt, I have a lot more options open to pay off that loan. The original plan, after eliminating credit card debt, was to split the former $720 payment. $360 would go to savings, and $360 to extra principal on the car loan. I'm starting to question that distribution (I'm thinking of leaning more toward savings), but I've got a month to figure out a plan before it goes into effect.

(NB: This just happened to be my 800th blog post. Wow. It started out with a paragraph and a 5-point bullet list, but has expanded to a 3000-word essay. Maybe I should write a book.)

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Article posted on Oct 11

Wells Fargo ATMs

• Posted by Ryan Finnie on October 11, 2009, 7:55 pm

Earlier this year, Wells Fargo rolled out a new generation of ATMs. Previously, to make cash or check deposits, you put the bills and checks into a supplied envelope, told the ATM how much you were depositing, then inserted the envelope. These new ATMs will accept loose stacks of bills and checks.

Last month I made a cash deposit. I put the stack of bills into the slot, it scanned each one, and (correctly) counted the total value of the cash. It was nice, but I was only mildly impressed. Bill scanning technology has been around for a long time and is pretty refined.

Today I deposited a check. (That doesn't happen often anymore, so it had been awhile.) Again, I pressed the "deposit" button the screen and inserted the check. It scanned the check, figured out the check number and amount, and verified the amount to me. It even printed a small version of the scanned image on the receipt, with the check's bank account number removed from the image. Okay, now I'm impressed.

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Article posted on Oct 11

The very best 1995 has to offer.

• Posted by Ryan Finnie on October 11, 2009, 3:26 pm

Here's a list of the many wonderful things you cannot do with your auto loan on bankofamerica.com:

• Make a payment online. [1]
• Set up an automated payment schedule. [2]
• View detailed statement information, including principal+interest for your last payment.
• Retrieve statements from previous months.
• Switch to paperless billing.

And if you would like any of these services kindly not offered by bankofamerica.com, simply do not call 800-345-1248 any time, day or night, as they keep banker hours.

[1] You may make a single payment on, ironically named, myeasypayment.com. This site requires you to fill in all information about your loan account and payment information, in excruciating detail (thank god for Firefox saved forms), manually, each time. Imagine having to fill out a loan application each time you wanted to make a payment.
[2] There is a link that says "Request Automatic Payments setup", which takes you to myeasypayment.com, which does not let you set up automatic payments.

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Article posted on Sep 27

Build a safety net into your checking account

• Posted by Ryan Finnie on September 27, 2009, 5:38 pm

Now that my bank allows you to cancel overdraft "protection", I logged in and did so recently. Having a debit card declined is vastly preferred to overdraft charges for me, but I would just rather not run out of money in the first place. It's been years since it's happened, but I decided to build a safety net into my checking account in Quicken. I went up to the first of the year and put a $300 unreconciled charge in. The net effect is it looks like I have $300 less than I actually have. (I ignore bank/ATM balances, as they almost always don't take into effect charges that haven't hit the bank yet. Always use your financial planning software or checkbook as a reference point for how much usable money you have.)

However, the little accountant in the back of my head was waving his finger back and forth, as while this is a great idea from a personal financial perspective, leaving a virtual placeholder charge not balanced with anything else isn't very good accounting. So instead, I looked to my "Stored Credit" account in Quicken. It's used for tracking gift cards and whatnot, and is treated as an asset account, not a cash account (since you can't use gift cards to pay off debts). So what I did is made the $300 a transfer from Checking to Stored Credit. It'll still remain unreconciled, but now the $300 is still counted toward my net worth.

I haven't done so, but you could take it further and set up a scheduled transaction to "transfer" $25 per month from Checking to Stored Credit. That'll nab you $300 per year in safety net money. At the end of the year, simply roll it up into one transaction (since we're talking about virtual transactions here), and you'll have an even stronger safety net.

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Article posted on Jul 12

My timing couldn't have been better

• Posted by Ryan Finnie on July 12, 2009, 3:50 pm

On March 9, I bought 10 shares of SPY, an ETF that mimics the S&P 500. ETFs are also available that track the Dow Jones Industrial Average (DIA) and the NASDAQ-100 (QQQQ). Essentially, these stocks allow you to invest in the stock market index's progress without investing in individual stocks which have higher individual risks than the stock market as a whole. Anyway, I did this mostly because I believed that the market would eventually recover, and it would help even off the loss I've seen from the 10 shares of SPY that I bought in 2002.

Little did I know how right I was. March 9, 2009 was the exact day the S&P 500 hit its 10-year low. Go me.

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Article posted on Jun 10

Ally Bank update

• Posted by Ryan Finnie on June 10, 2009, 12:15 pm

Following up on Saturday's post: On Sunday morning, I received a call on my cellphone from an 800 number. "I'm not answering that on a weekend," I thought, and went back to bed. When I got up later, I found a comment waiting for approval on my blog, and it was from Al de Molina. (I did a little checking, and it seemed authentic, either from him himself, or something like a PR firm on his behalf.)

Sure enough, the voicemail waiting for me was from Alex from Ally bank wanting me to return his call. We played phone tag Sunday, and he got back to me Monday morning.

The call was pretty short. Alex said that the info given to me by the first call was wrong, and the rate quoted on the day you begin the fund transfer is the rate you should get. The problem comes from the fact that yes, some days they don't initiate the transfer on their side until the next day. However, it should have been a simple call to fix that in those sorts of situations.

My funds transfer has been completed, and I just verified that my account is showing 2.50% APY. So if this sort of situation happens to you, be persistent. Point out my experience if you want. Obviously this only applies to Ally Bank, since other banks could have different policies.

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Article posted on Jun 6

[RESOLVED] Ally Bank: No sneaky disclaimers, no fine print, just lies.

• Posted by Ryan Finnie on June 6, 2009, 6:32 pm

UPDATE: The situation has been resolved to my satisfaction. Al de Molina did follow through with his comment to get the situation fixed (see comment below), and I am impressed that this was taken care of before I even had a chance to drop the letter off in the mail.

I have made an updated post, with information about what happened, and what it means to other customers as well.

UPDATE 2 (2009-01-22): It's six months later, and I am still satisfied with Ally. I even switched over my savings account to them shortly after that. Moreso, shortly after my ordeal, they added a "Ten Day Best Rate Guarantee":

When you fund your CD within ten days of opening or renewing your Ally account, you automatically get the best rate we offer during that time period.

I'd like to think I helped put that policy in place, and it really does go beyond what you'd expect from a bank.

This post has been getting a lot of Google juice lately, and I'm sure a lot of people who come here have complaints about Ally for whatever reason. It's understandable, you're going to have problems with a company no matter what (I'm not too thrilled with my cable company right now, for example, but that's another story). Just be sure to be patient and courteous. Remember that this post wasn't me screaming "ALLY SUCKS!!!!!"; I was polite but direct, and it worked out well for me.

The original post is retained below.

Well, regarding that 2.50% CD I opened? It's now 2.30%. A phone call got me nowhere; they're claiming the rate is based on a seemingly random date, related to neither the date I opened (and funded) the account, nor the date the funds cleared. The difference between the rate they quoted me and the rate they gave me is $3.74 over the lifetime of the CD, but I'm not letting them get away with this, especially given their "open" brand. I have sent this letter to GMAC Financial Services / Ally Bank CEO Al de Molina, copied below.

While you are reading, watch this Ally Bank commercial, but with these lines:

"Would you like a 2.50% CD?"
"Yeah." [Gives her a 2.50% CD.]
"Would you like a 2.50% CD?"
"Yeah." [Gives her a 2.30% CD.]
"You didn't say I would get a lower APY."
"Well you didn't ask."

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Article posted on Jun 5

Achievement Unlocked: Credit Card Solvency

• Posted by Ryan Finnie on June 5, 2009, 3:06 pm

Click for a more readable graph. Savings is blue on the top, CC debt is green on the bottom. The line is the delta between savings and debt.

As of today, I officially have $3.37 more savings than I do credit card debt. As I mentioned in February, I had reached the point where my liquid assets (savings + checking + cash) were more than my credit card debt. However, a checking account is rapidly moving up and down, and savings vs CC debt is a more stable comparison. It wasn't until today that I could theoretically drain my savings to pay my CC debt, while still not affecting my day-to-day finances. Again, not that I would, so it's a mostly symbolic milestone, but it's a milestone nonetheless.

In other financial news, I have invested $2500 in General Motors. No really. Well...

GMAC Bank is now Ally Bank, and is offering some pretty decent rates. Well, yesterday they were even higher, when I opened a $2500 no penalty 9 month CD at 2.50%. Today they lowered it to 2.30%, after accusations from competitors that Ally was using the bailout as an unfair advantage over competition. (This link is pretty inflammatory against the competing banks, but it's the only news article I could find today, and is at least factually accurate.)

So I'm lucky I opened the CD when I did at 2.50%, even though 2.30% would have been very decent compared to the 1.39% my "high yield" money market account has plummeted to.

On that note, can anyone explain to me why "no penalty" CDs exist? My guess is the transaction limit (basically not being able to take, say, $100 out of your $2500 CD, only the whole thing) and long term stigma of CDs act like a mental barrier from people withdrawing early from a no penalty CD. But the question is, does that justify the significant APY difference between a savings/money market account and a no penalty CD? I'm not complaining, but I have wondered about that, from the bank's point of view.

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