M1 Finance Review: Investing, Banking, and Borrowing for Hands-Off Investors

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.

One of our favorites

M1 Finance is one of our favorite robo-advisors. It ranks among the best we've seen in these categories:

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.

Top perks

Integrated investing, banking, and borrowing

M1 Finance gives you access to a variety of investment products 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. That said, the platform does not offer checking accounts as of February 2024. Look elsewhere if you want your all-in-one account to include debit cards.

No commissions or account fees

M1 Finance watches costs at every turn: no commission fees, no account management fees, 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.

Diverse account types

M1 Finance lets you open joint brokerage accounts with partners and custodial accounts for minors. Like individual brokerage accounts, they're commission-free. However, only paying M1 Plus members get access to UTMA/UGMA custodial accounts.

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.

Limited-time promotions

M1 Finance frequently offers promotions available to new users for things like transferring a brokerage account or making a first-time deposit. Check our M1 Finance promotions page to keep tabs on current offers.

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. ET every day the New York Stock Exchange (NYSE) is open. The afternoon trading window begins at 3 p.m. ET 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.

Investing is at the core of your M1 Finance account. The M1 Spend Credit Card integrates with the investment account to automatically reinvest rewards into 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 and Roth, SEP, and rollover IRAs; trust accounts; a savings account; and a line of credit.

The premium membership, M1 Plus, gives members perks on the following products for $36 per year or $3 per month, though the first three months are free

• M1 Spend is a credit card that earns up to 10% cash back with popular brands. Rewards may be automatically reinvested into a stock portfolio; M1 Plus members earn bigger rewards.
• M1 Earn is a high-yield savings account offering very competitive APYs.
• 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 features like extra trading windows, on-demand crypto trades (10 per month), and custodial accounts.

Pricing and fees

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 5 p.m. ET 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.

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 saving 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:

At The Motley Fool Ascent, brokerages are rated on a scale of one to five stars. We primarily focus on fees, available assets, and account types; however, we also take into account features like research, education, tax-loss harvesting, and highly rated mobile apps. Our highest-rated brokerages generally include low fees, a diverse range of assets and account types, and useful platform features.

See our full methodology here: Ratings Methodology