M1 Finance Review 2024

Stock Trade Fee:N/A

Account Minimum:$100

Promotion:N/A

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Trading involves substantial risk of loss

Eric Rosenberg

Last updated: Jul 28, 2020

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M1 Finance is a no-fee brokerage that could meet the needs of most investors. It has a limited range of investments and doesn’t have as many features as some competitors, but among brokers that don’t charge you a trading fee, it is one of the best around.

Pros:	Cons:
No fees for trading stocks and ETFs Support for taxable and retirement accounts Buy whole or fractional shares	Limited supported investments All trades execute during one daily window Only basic research and education resources

M1 Finance Overall Rating

2.6

Here's how we rate brokers

Cost & Fees

5.0

Banking

0.0

Account Types

3.5

Customer Support

2.5

Tradable Securities

2.5

Promotions

1.0

Account Opening

4.5

Regulations, Reputation & Security

5.0

Trading Platforms

2.0

Research & Education

2.0

Order Types

1.0

Trading Specs
General Information
Trading Features

Official Site:www.m1finance.comDemo Account:Open Demo AccountAccount Minimum:$100Stock Trade Fee:N/APromotion:N/AETF Trade Fee:$0Mutual Fund Trade Fee:N/AOptions Base Fee:N/AOptions Per Contract Fee:N/ABonds Trade Fee:N/AFutures Trade Fee:N/AForex Trade Fee:N/A
Phone Trades:N/ABroker Assisted Trades Fee:N/AAnnual Account Fee:$0Account Transfer Fee:$100Account Closing Fee:$0Account Inactivity Fee:$20IRA Annual Fee:$0IRA Closure Fee:$100Tradable Securities:Stocks, ETFsCommissions Free ETFs:N/ACommission Free Mutual Funds:N/A
Number of Mutual Funds (Total):N/AComplex Options Max Legs:N/AAccount Types:Taxable, Joint, Retirement Accounts, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, TrustsOS compatibility :N/AWeb Platform:YesMobile Trading:iOS App, Android AppOrder Types:N/A

Introduction

M1 Finance allows you to trade for free, buy fractional shares, and invest in professionally designed portfolios. It also has a great checking account and a low-cost lending account.

M1 Finance is a recent addition to the no-fee investment world. It offers a combination of investment, lending, and banking accounts that could make M1 your primary financial institution. You can find the most popular types of taxable and retirement accounts and trades have no commissions or fees. You can also invest in fractional shares, making the entry point to start investing at M1 very low.

It has a limited menu of investment options, just stocks and ETFs. While it doesn’t have quite the depth as some of the biggest discount brokerage firms, it offers plenty to get excited about, particularly when you factor in the unbeatable price: free.

Cost & Fees5.0

The basic version of M1 Invest charges no fees and allows you to buy and sell stocks and ETFs for free. An upgraded version costs $100 for the first year then $125 per year for more features.

Buying a stock? Free. Selling a stock? Free. Stocks and ETFs are free to trade in an M1 Finance account. And you don’t even need enough cash to buy a full share. Choose the dollar amount you want to invest and you can buy fractional shares through M1 Finance.

The basic account doesn’t charge many fees outside of some uncommon activity. There is an inactivity fee for accounts with a balance below $20 with no trades in the last 90 days. You may also run into some government fees, but those are likely never more than a few cents per trade.

The upgraded M1 Plus account costs $125 per year after a discounted $100 for the first year. With M1 Plus, you get a high interest rate on checking, a cash back debit card, extended trading hours, and more.

Account Types3.5

You can open an individual or joint brokerage account, most popular types of retirement accounts, and trust accounts at M1 Invest. The three main types of accounts at M1 are for investing, checking, and borrowing.

Invest accounts are the cornerstone of the M1 Finance experience. This is the brokerage account that allows you to buy stocks and ETFs. Your portfolio is displayed using an innovative pie-chart. You can add and remove investments from the account and make tweaks and adjustments at any time. Customize your portfolio or pick one of more than 80 predesigned portfolios to get started.

Borrow accounts act like a line of credit backed by your investment account. You can borrow up to 35 percent of your account value and rates are very, very competitive with no credit check required. Because your loan is backed up by your investments, like with a margin account, the loans are considered low-risk and come with interest rates similar to what you would pay for a mortgage. You can use the funds for anything you want.

Spend is the checking account at M1 Finance. The FDIC insured account has no minimum balance requirement and no recurring fees. It charges no ATM fees and will reimburse one ATM fee per month from other banks. If you have M1 Plus, you’ll earn a high yield interest rate on the checking account, one percent cash back with the debit card, and get four monthly ATM reimbursements.

Behind the scenes, Spend accounts, currently rolling out to a limited audience, is maintained by Lincoln Savings Bank.

Tradable Securities2.5

The biggest downside of M1 Finance is a limited menu of investments. You can buy and sell stocks and ETFs. But that’s it.

M1 Finance supports major US stock market investments. That means you can buy and sell stocks and exchange traded funds (ETFs). However, that leaves out a large swath of investments like bonds, options, and mutual funds.

One somewhat unique feature at M1 is the ability to buy fractional shares. If you want to buy Berkshire Hathaway A shares but can’t afford the six-figure share price, for example, you could buy $20, $100, or any other amount.

While you can’t buy bonds directly, you can use ETFs to buy bond funds that work a lot like mutual funds. ETFs have lower fees than mutual funds on average as well.

Account Opening4.5

Opening a new account at M1 Finance is a quick and easy process. After confirming your email address, you are prompted to enter standard personal information to open your account.

M1 Finance requires you to be a US citizen or legal permanent resident with a Green Card to open a new account. The entire process is fairly quick and easy.

To start, you’ll have to verify a good email address and enter a password. Once your email is verified, you can enter your contact information, answer some brief questions, and fund your account.

During business hours accounts are verified nearly instantly. If you open an account during evening or weekend hours, your application will process on the next business day. Most accounts require a $100 minimum opening deposit. Retirement accounts require a $500 minimum to get started.

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Demo Account

Trading Platforms2.0

M1 finance has mobile and web-based trading platforms that are easy to use but don’t come with advanced or complex features.

M1 Finance does not support live market order trading. All trades go through in a batch every morning, which is part of how the fractional share investing can work. But that means you don’t need a trading platform with live prices for every asset. The platform only has to support stocks and ETFs for the daily trade window.

You can view basic details on each security on the website or mobile app before clicking the button to buy or sell.

You can choose a stock by searching your clicking through from your portfolio. Once selected, the screen to enter a buy or sell order is easy to follow.

Trades on the mobile app are simple to enter and confirm. There are few trade options to ajdust, which makes it easy to follow through the process.

Order Types1.0

M1 Finance uses a daily trading window that opens at 9:00 am Central. All trades entered are processed during that trading window.

If you want to day trade or buy and sell multiple times during the business day, you’ll need to look elsewhere. M1 trades all go through each day around 9:00 am Central time. If you enter a trade any time later in the day, it will be processed the next day.

This trading limitation is another negative for M1 Finance. It keeps things simple for new investors. However, you can’t sell a stock in a hurry if there’s bad news. You’re stuck with it until tomorrow in most cases.

Banking0.0

The M1 Standard account includes the Spend account, M1’s version of a checking account. The free account comes with great features that make it a good choice to complement an investment account at M1.

The basic M1 Finance spend account is a free checking account with no minimum balance requirement. There are no fees for most common activity and it even reimburses you for ATM fees charged by other banks automatically once per month.

If you pay for the M1 Plus account, your checking account gets a big upgrade. That includes a high yield interest rate (1.50 percent as of 9/20/2019), 1 percent back on debit card purchases, and four ATM reimbursements per month.

The low-fee, online-only account is FDIC insured and could easily meet the banking needs of anyone as long as they don’t get paid in cash.

Customer Support2.5

M1 Finance customer service is available via email or phone during business hours.

There’s no 24/7 support, but it is easy to reach M1 Finance when you need to. An email contact form is a quick option to drop in a question. M1 says that emails are responded to within one business day.

Phone support is available from 9:30 am-5 pm ET Monday-Friday except for holidays.

Promotions1.0

There is no public bonus or promotion, though referrals may offer an opportunity for a $10 bonus.

Through a refer-a-friend promotion, you and a friend can both qualify for a $10 bonus. If you already have an account, click here when logged in to access the referral hub.

Regulations, Reputation & Security5.0

Like all US brokerage firms, M1 Finance is regulated by the SEC and other government bodies. It is a member of the SIPC and FDIC.

M1 Finance brokerage accounts are insured by the SIPC and bank accounts are insured by the FDIC.

Brokerage activity falls under the auspices of the Securities and Exchange Commission. M1 Finance is a FINRA member. It has no public complaints or disclosures listed on FINRA, which indicates strong compliance.

Research & Education2.0

Research and education resources are available at M1 Finance but are somewhat limited.

One place most free brokerage firms fall short is research and education. M1 Finance has a blog and some educational resources, but overall most investors are better off arriving knowing at least a little bit about how the stock market works.

When logged in, you get some details on the stocks and ETFs you can buy and sell. Again, however, the research details you can find are freely available on many websites and some major brokerages offer much more depth.

Trading experience

M1 Finance is best for beginner to intermediate stock and ETF investors. It is not ideal for active traders or experts looking for an advanced experience.

Because you can’t trade live with the market and the trading platform is ideal for newer investors that don’t want the most advanced features. In reality, most investors fall within the beginner to intermediate level that is ideal for M1 Finance.

It’s easy to get up and running quickly and you won’t get stuck paying fees for learning how the markets work. But if you want advanced charting, in-depth research reports, or advanced trades, M1 won’t meet your needs.

FAQ

Is M1 Finance regulated?

Yes, by the SEC, SIPC, FDIC, and FINRA

Where is M1 Finance based?

Chicago, US.

When was M1 Finance founded?

2015

How does M1 Finance make money?

Plus account fees, loan interest

How do I deposit in M1 Finance account?

Electronic funds transfer

How do I withdraw money from M1 Finance?

Electronic funds transfer

How do I open an account with M1 Finance?

Online at M1 Finance or in the M1 Finance mobile app

Does M1 Finance offer margin accounts?

No, but it does offer loans you can use for investment purposes

Are funds at M1 Finance secured or insured?

SIPC and FDIC insured

Overall2.6

M1 Finance does have the widest list of features but the pricing is excellent and it does what most investors need.

M1 Finance is a good choice for beginner to intermediate investors looking for a no-fee brokerage with an excellent linked checking account. While the best of M1 Finance comes to members of its Plus plans that cost $125 per year after the first year, even the basic accounts are pretty good.

M1 Finance falls short of the major discount brokerages when it comes to the types of accounts, trades, and depth of research. But the price is right. For a no-fee brokerage, it is near the top of the pack.

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M1 Finance Review 2024

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