Banking » Reviews » M1 Finance Review 2024 – Long Term Investing With Banking Features
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M1 Finance Review 2024 – Long Term Investing With Banking Features

M1 Finance has become the go-to brokerage account for sophisticated investors looking for complete control of their investments
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

M1 Review

M1 Finance is a trading platform that offers investors greater control over their investments and high level of customization.

With over 500,000 clients and over $2 billion assets under management, M1 Finance has become the go-to brokerage account for sophisticated investors looking for complete control of their investments.

  1. M1 Invest

If you want total control over your investments, M1 Invest is an ideal option for you. This service allows investors to choose stocks and ETFs or invest in pre-selected portfolios. M1 Invest requires a minimum investment of $100 for a personal investment account and $500 for retirement accounts.

  1. M1 Borrow

This is the latest addition to the M1 Finance list of products. As you invest using your M1 brokerage account, M1 Finance opens a line of credit with one of the lowest interest rates in the market.

M1 Borrow is available to taxable M1 brokerage accounts with a balance of $10,000 or higher. The line of credit is available up to 35% of the asset value, with no set payment schedule. However, this line of credit has some risks such as the possibility of portfolio value decline, losses, and increasing interest rates.

  1. M1 Spend

This is a checking account that is available in the M1 Finance app. M1 Spend is FDIC-insured, and free to use. There is no minimum balance requirement, and investors also get a free debit card. You can use this account to receive paychecks and pay bills conveniently.

  1. M1 Plus

If the M1 Spend is insufficient, you can upgrade to the M1 Plus to get even more benefits at a premium price of $125 per year. This account offers cash backs on purchases, interest on M1 spend account balance, a lower M1 borrow interest rate, and an additional afternoon trading window.

M1-Finance review

On M1 Secure Website

Account Options

– Pie Investing
– Fractional Shares (Stocks, EFTs)
– Checking Account + Debit

Minimum Deposit

$100

PROS

CONS

Pros and cons

When you sign up for M1 Finance, there are various benefits and drawbacks that you should expect as you trade. They include:

Opening an M1 Finance trading account is free. However, you need a balance of at least $100 to start investing.

There are no commissions, broker fees, or monthly subscription fees involved when using M1 Finance, However, investors may pay a small fee for account transfers and paper statements.

As you trade, M1 Borrow allows investors to access a line of credit to purchase more stocks. You can access credit up to 35% of your asset value, and pay an interest rate that is below the market interest rates.

M1 Finance allows traders a single trading window in the morning. This means that afternoon trades cannot be executed until the next trading session, the next day. However, investors who buy M1 Plus membership get a second trading window in the afternoon.

If your account balance is below $50, you must accumulate the required minimum to start trading. Also, to copy trades of top traders, you must have a minimum balance of $200.

If you want greater control over your investments, use M1 Finance to customize your portfolio to your preference. This tool allows you to choose the pies to invest in from a list of over 6,000 stocks and ETFs.

If you can’t afford to buy a full share of your favorite brand’s stock, use M1 Finance to buy a fraction of the stock. With a limited budget, you can own fractions of stocks of multiple companies, and profit from their price movements.

Tax-loss harvesting involves selling securities at a loss and using the losses to lower the tax liability. This concept is common in Robo-Advisor platforms, but it is not supported by M1 Finance.

Traders can only trade stocks and EFTs on M1 finance. There are no mutual funds on the platform. Also, it does not allow trading of options contracts, forex, and cryptocurrencies.

M1 Finance allows investors to create an unlimited number of slices from a pool of over 6000 stocks and EFTs, hence putting investors at risk of over diversifying their portfolio.

Main Features For Investors

Here are the top investing features of M1 Finance:

  1. Pie Investing

When you sign up, M1 Finance suggests a pie with a list of preselected investment categories ideal for your risk profile. You can customize this pie to your preference by reallocating some of the investment categories.

Pick your investments from a pool of over 6,000 stocks, ETNs, and ETFs, and specify the weight of each slice till they add up to 100%.

  1. Fractional shares

If you have a limited budget, you can buy a fraction of a stock of companies you love. For example, if you can't afford a $1000 stock, you can pay $100 to buy 1/10 of the stock.

  1. No commissions

M1 Finance does not charge transaction fees, commissions, or management fees. However, there are fees for other account activities like transfers and paper statements.

  1. Dynamic Rebalancing

When customizing your pie, the allocations may shift depending on how well the investments perform. Some slices will expand, while others will shrink.

M1 Finance’s dynamic rebalancing brings the pie back in shape when you top up or withdraw. It buys less of assets that have grown while buying new deposits of underweight assets to bring them back to the target allocation.

Account Types + Trading Platforms

M1 Finance is an online finance tool that is accessible via the web-based platform or mobile app. The mobile app is available on iPhone and Android devices. You can access all M1 services from signing up for a new account, funding the account, to allocating the pies to creating a diversified portfolio. M1 Finance recently introduced a “Dark Mode” to make the mobile app gentle on the eyes.

The M1 Finance website mirrors the functionality of the mobile app, and it offers a simple sign-up process while giving the customer as much control as possible on their choice of investments. The web-based platform allows you to see a summary of your portfolio, edit the pie, and get more information about an investment. The website has an elegant design.

M1 Finance offers two main types of accounts. Here is how both accounts compare:

  1. Core M1 Account

This is a checking account and a VISA debit card that allows customers to receive paychecks, pay bills, and make purchases using the debit card. This account does not charge an annual fee, monthly maintenance fees, and it reimburses customers one ATM fee each month. 

Customers get a line of credit of up to 35% of their asset value through M1 Borrow at an interest rate of 3.5%, with no defined payment schedule. Customers can only trade in the morning trade window.

  1. M1 Plus Account

This is an upgrade of the basic M1 account, and it allows you to earn 1% cashback on purchases made using the debit card. Customers can borrow up to 35% of their portfolio value at an interest rate of 2%, which is 1.5% lower than the Core M1 account. 

Customers also get a 1% APY on the uninvested account balance. This account offers an additional afternoon trading window, and access to Smart Transfers, ATM fees reimbursement 4 times every month. M1 Plus account has a $125 annual fee.

How to Open an Account With M1 Finance?

M1 finance requires applicants to be 18 years or old, be US citizens or permanent US residents, and have a current US mailing address. If you meet these requirements, follow these steps to get started with your M1 Finance account:

Step 1:

Provide your email and your preferred password on the M1-Finance Application process 1

Step 2:

You can select from the prebuilt pies, or create your pie from scratch by selecting your preferred investments from a list of ETFs and stocks. The Expert pie is displayed on the screen as you customize your portfolio.

M1-Finance Application process 2

Step 3:

Select the type of account you want. Choose from an individual or M1-Finance Application process 3

How We Rate And Review Banks: Our Methodology

The Smart Investor team extensively reviewed hundreds of banks and credit unions. We assessed them based on four main categories, each with specific features:

  • Diversity of Products and Their Attractiveness (40%): We extensively analyzed the breadth and appeal of each bank's product offerings, including savings accounts, checking accounts, loans, investment options, and more. Higher ratings were assigned to banks with a diverse range of products that are attractive in terms of interest rates, fees, terms, and additional features. This category provides insights into the variety and value of the bank's offerings, crucial for meeting customers' diverse financial needs.

  • Account Features (30%): This category delves into the features and benefits accompanying each bank's accounts. We scrutinized factors such as promotions, deposit and withdrawal options, ATM accessibility, online and mobile banking functionalities, as well as additional perks like overdraft protection and rewards programs. Banks offering comprehensive and convenient features received higher ratings, reflecting the overall value of their accounts to customers.

  • Customer Experience (20%): A positive customer experience is paramount in banking, so we evaluated each bank's performance in this area. This included assessing the ease of account opening, quality of customer service, availability of support channels, and overall user satisfaction. Ratings were based on factors such as responsiveness, efficiency, and the bank's commitment to meeting customer needs, ensuring a seamless and satisfactory banking experience.

  • Bank Reputation (10%): The reputation of a bank is a critical consideration for customers. We examined factors such as financial stability, regulatory compliance, and public perception to determine each institution's overall trustworthiness and reliability. Higher ratings were awarded to banks with strong reputations, reflecting their credibility and ability to inspire confidence among customers.

  •  

By considering these categories, individuals can make informed decisions that align with their financial needs and preferences, ensuring they choose a bank that offers competitive products, excellent features, a positive customer experience, and a solid reputation.

Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
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