M1 Finance is a low-cost robo-advisor for self-directed investors. In addition to no commission or account management fees, this financial services app includes integrated investing, borrowing, and banking. This allows investors to get a fuller picture of their finances in one place and leverage their investments through borrowing. Read our full M1 Finance review to find out whether it's right for you.
Open Account for M1 Finance
OnM1 Finance'sSecure Website.
Ratings Methodology
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
Bottom Line
A solid robo-advisor pick with standout offerings to integrate your investing and banking needs in one app.
Fees:
$0 commissions and no management fee. M1 Plus membership costs $10 per month.
Account Minimum:
$100
Open Account for M1 Finance
OnM1 Finance'sSecure Website.
One of our favorites
M1 Finance is one of our favorite robo-advisors. It ranks among the best we've seen in these categories:
- Best Robo-Advisors
- Best Robo-Advisors for Beginners
- Best Investment Apps
Full M1 Finance review
This robo-advisor is a good fit for: Self-directed investors looking for an easy-to-use app to manage investing, banking, and borrowing in one place.
Pros
- Integrated investment, banking, and borrowing
- No commissions or account fees
- Dynamic Rebalancing
- Fractional share trading
Cons
- No access to human advisors
- Not good for active traders
- No mutual fund access
- No tax-loss harvesting
- $100 account minimum
Top perks
Integrated investing, banking, and borrowing
M1 Finance gives you access to a variety of investment products, an interest-bearing checking account, and a high-yield savings account. With the Owner's Rewards Card by M1, you can earn between 2.5% and 10% cash back and automatically invest the money to grow your portfolio. The platform offers personal loans for up to $50,000, as well as margin loans at competitive interest rates.
No commissions or account fees
M1 Finance watches costs at every turn: no commission fees, no account management fees, no checking account maintenance fee, and no application or origination fees for borrowing. It even reimburses ATM fees.
That doesn't mean M1 is completely fee-free, though. You'll pay a $50 account maintenance fee if your account balance is less than $50 and there's no trading activity for 90 days. Other fees include a $100 outgoing transfer fee and $100 IRA termination fee, along with various charges if you request paper copies of documents.
Dynamic Rebalancing
When you deposit money into your account, M1 Finance's algorithm identifies the segments of your portfolio that are underweight and puts money there first to help you stay on target with the allocation you chose. And when you withdraw money, the algorithm sells the portions of your portfolio that are overweight first.
Retirement investing
In addition to traditional stock brokerages and trust accounts, M1 Finance offers traditional, Roth, SEP IRAs, and rollover IRAs
What could be improved
Access to advisors or recommendations
Unlike other online brokerages, M1 doesn't provide investment advice or recommendations. It also doesn't provide access to human advisors.
Not good for active traders
M1 has two trading windows. The morning window, which is available to all customers, begins at 9:30 a.m. Eastern time every day the New York Stock Exchange (NYSE) is open. The afternoon trading window begins at 3 p.m. Eastern time and is only available to M1 Plus customers. To use both trading windows in a single day, you need to have at least $25,000 in your account.
Essentially, what this means is you can only trade once daily, or twice per day if you're an M1 Plus customer with the $25,000 account minimum. This shouldn't matter to long-term investors, but if you're a frequent trader, M1 isn't a good fit.
No mutual fund access
Mutual funds are a popular investment choice with hands-off investors. But M1 doesn't currently offer mutual fund access.
Tax-loss harvesting
Investors in high tax brackets or with large investment accounts will miss out on tax-loss harvesting, which could reduce their tax liability by offsetting taxable capital gains.
Automatic rebalancing
M1 Finance's Dynamic Rebalancing helps to maintain your target asset allocation using the funds flowing into and out of your account. However, M1 Finance will not automatically reallocate the funds you've already invested; you must instruct the app to do so. That means you have to keep an eye on your asset allocation and ask for a rebalance if your portfolio starts to get out of whack.
This brokerage isn't as hands-off as some competing robo-advisors, though its design makes it easy to see how your portfolio's allocation compares with your target so you know when to ask for a rebalance.
$100 account minimum
M1 has a $100 minimum to open an account (or $500 for retirement accounts). That's a drawback, considering that many competitors have no minimum to open an account.
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
| Account | Fees | Account Minimum | |
|---|---|---|---|
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, ETFs, and options | $0 | Open Account for Robinhood |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, $0 for options contracts | $0 | Open Account for SoFi Active Investing |
Rating image, 5.0 out of 5 stars. 5.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 commission for online U.S. stock and ETF trades; trade fractional shares for as little as $1 | $0 | Open Account for Fidelity |
How M1 Finance works
Investing is at the core of your M1 Finance account. The M1 Spend checking account integrates with the investment account to automatically fund your portfolio. M1 Margin Loans allow you a line of credit of up to 40% of your investment account balance of at least $2,000.
M1 Finance's investment account is built for self-directed investors, so you start by customizing your portfolio with stocks and ETFs, including fractional shares, or choosing from among expert-designed portfolios. You can answer questions about your financial goals and use M1's tools to make more informed investment choices.
M1 lets you visualize the balance of your portfolio with its "Pie" interface, which helps you easily see the weight and performance of each stock or ETF.
Minimum investment
A minimum initial investment of $100 is required to get started. After that, you can fund your account with just $10 at a time. Retirement accounts require a minimum initial investment of $500.
Services offered
M1 Finance offers individual and joint brokerage accounts; traditional, Roth, SEP, and rollover IRAs; trust accounts; a checking account; and a line of credit.
The premium membership, M1 Plus, gives members perks on the following products for $95 per year or $10 per month, though the first three months are free
- M1 Spend is a fully functioning, FDIC-insured checking account. It has no monthly fee and no minimum balance. M1 Plus members earn 1% APY and 1% cash back on debit card purchases and ATM fee reimbursem*nt for up to four transactions.
- M1 Borrow is a portfolio line of credit that lets you borrow up to 40% of the balance of your taxable investments once it reaches at least $2,000. The line of credit comes with a low variable interest rate, no credit check, and no application. M1 Plus members get a discounted interest rate.
- M1's Dynamic Rebalancing helps to maintain your portfolio when you make trades, and M1 Plus members have access to additional automated features to optimize investments.
Pricing and fees
| SERVICE/ITEM | M1 FINANCE COST |
|---|---|
| Account management fee | 0% |
| Investment fund fees | 0.06%–0.20% |
| M1 Spend account fees | $0 |
| All-in investing and banking fees | 0.06%–0.20% |
| M1 Plus annual fee | $95/year |
Data source: M1 Finance.
Customer service and support
There are two types of support that clients of a robo-advisor could need: investment advice and help with technical issues. For product support, M1's customer success team is available via email between 9 a.m. and 4 p.m. EST on days when the U.S. stock market is open. It has also published a library of FAQs and customer support articles
The company doesn't provide individual investment advice or stock recommendations. It provides personal finance education through its blog, Taking Stock.
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RELATED: See The Ascent's comparison of M1 Finance vs. Robinhood.
M1 Finance is right for you if:
- You're looking for a self-directed investing app and don't need the perks of a full-featured broker.
- You want to integrate your investing and spending into a single account.
- You want easy access to margin loans.
- You want to build your retirement savings.
- You're not a frequent trader.
Compare M1 Finance to other brokerages
Wondering how M1 Finance stacks up to the competition? Check out our reviews:
- M1 Finance vs. Robinhood
FAQs
M1 Finance is geared toward long-term investors, since it doesn't allow for multiple trades. Unlike Robinhood, it doesn't offer options trading. Active traders will probably prefer Robinhood's platform, which makes trading easy for beginners.
Yes. Any customer who has funded a brokerage account can create a crypto account. You can use M1 Finance's Pie system to create your own crypto portfolio. As of August 2023, the company said it will soon start offering expert crypto Pies built on themes like DeFi and large-cap
M1 Finance doesn't have account maintenance fees, management fees, or commissions. But some things, like outgoing transfers, will cost you. Also, many of the platform's most appealing features are only available to clients who pay for M1 Plus, which costs $95 annually.
Our Brokerages Experts
By:Dana Sitar
Dana Sitar (@danasitar) has been writing and editing since 2011, covering personal finance, careers, and digital media. She trains journalists, writers, and editors on writing for the web and has written about finance and careers for publications including The New York Times, HuffPost, and a column for Inc. Magazine.
By:Robin Hartill, CFP
Writer
Robin Hartill, CFP®, is a personal finance writer and editor whose work frequently appears in various national publications. She wrote the syndicated “Dear Penny” financial advice column for four years.
Fact CheckedNathan Alderman
Fact checker
Nathan Alderman has worked with The Motley Fool since 2005, making errors his arch-enemies in a variety of roles including a six-year stint as the dedicated fact-checker for The Motley Fool's premium newsletter services. As The Ascent's Compliance Lead, he makes sure that all the site's information is accurate and up to date, which ensures we always steer readers right and keeps various financial partners happy. A graduate of Northwestern University's Medill School of Journalism, Nathan spends his spare time volunteering for civic causes, writing and podcasting for fun, adoring his wife, and wrangling his two very large young children.
