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As an investor seeking a new online stock broker, you might find yourself considering M1 Finance vs. Robinhood. Both of these brokers offer a suite of services beyond buying and selling stocks, so it can be hard to choose the best option for you. Read on to find out how M1 Finance and Robinhood stack up.
READ MORE: Best Stock Brokers
M1 Finance vs. Robinhood: At a glance
| Offer |
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|---|---|---|
| Rating |
Rating image, 4.5 out of 5 stars.
4.5 stars
Our 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 |
Rating image, 4.5 out of 5 stars.
4.5 stars
Our 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 |
| Commissions |
$0 commissions and no management fee. M1 Plus membership costs $10 per month. |
$0 for stocks, ETFs, and options |
| Account Minimum | $100 | $0 |
| Next Steps |
M1 Finance vs. Robinhood: Commissions & fees
Robinhood pioneered zero-commission trading and has stuck to that model ever since. Robinhood has $0 commissions on all trades of stocks, cryptocurrencies, and ETFs. For that reason, Robinhood is consistently ranked as one of the best ETF brokers. Robinhood continues to push the envelope with $0 commissions on cryptocurrency and options trades. Combine that with no account maintenance fee, and you've got a very low-cost broker.
M1 Finance offers $0 commissions on stock and ETF trades. Similarly to Robinhood, M1 Finance does not charge an account maintenance fee (though it does charge a fee for 90 days of account inactivity).
Investors on either platform will enjoy low transaction and maintenance fees, at least until they transfer their accounts elsewhere. For outgoing account transfers, M1 Finance charges $100, and Robinhood charges a $75 fee.
READ MORE: Best ETF Brokers
| M1 Finance | Robinhood | |
|---|---|---|
| Stock & ETF Commissions | $0 | $0 |
| Options Commissions | N/A | $0 |
| Crypto Commissions | N/A | $0 |
| Mutual Fund Commissions | N/A | N/A |
| Account Transfer Fee | $100 | $75 |
| Account Maintenance Fee | $0 | $0 |
Data sources: M1 Finance and Robinhood.
M1 Finance vs. Robinhood: Investments available
Like most brokers, M1 Finance offers stocks and ETFs. By allowing users to trade fractional shares, M1 Finance makes it possible for smaller investors to purchase big names, like Amazon and Google. However, M1 Finance only lets investors trade individual stocks and ETFs, which is hardly groundbreaking among brokers.
Robinhood allows customers to buy stocks and ETFs, and it supports fractional trading. However, Robinhood also allows investors to trade options and cryptocurrencies without charging a commission. That means customers can trade a wider range of investment options, without getting hit with transaction fees.
It is important to note that neither M1 Finance nor Robinhood support other investment options. Investors can't trade mutual funds, CDs, bonds, futures, or currencies on either platform.
LEARN MORE: Best Options Trading Platforms
| M1 Finance | Robinhood | |
|---|---|---|
| Stocks and ETFs | Yes | Yes |
| Fractional Shares | Yes | Yes |
| Options | No | Yes |
| Mutual Funds | No | No |
| CDs | No | No |
| Bonds | No | No |
| Futures | No | No |
| Crypto | No | Yes |
| Currencies | No | No |
M1 Finance vs. Robinhood: Account types available
M1 Finance offers individual retirement accounts including:
- Traditional IRAs
- Roth IRAs
- SEP IRAs
Joint and custodial accounts are helpful for transfer of ownership between M1 Finance customers. M1 Finance also offers margin, credit card, and checking accounts, which integrates investing, borrowing, and banking under one roof.
Robinhood's success is largely due to its simplicity. But that means Robinhood offers less account type options than some people may want. Robinhood investors have access to a taxable brokerage account for trading and a margin account for borrowing -- if they buy Robinhood Gold. M1 Finance might be a better fit for investors with complex tax or ownership situations.
LEARN MORE: Best IRA Accounts
| M1 Finance | Robinhood | |
|---|---|---|
| Taxable Brokerage | Yes | Yes |
| Joint Tenant | Yes | No |
| Margin | Yes | Yes, with Robinhood Gold |
| Robo-Advisor | Yes | No |
| Traditional IRA | Yes | No |
| Roth IRA | Yes | No |
| SEP IRA | Yes | No |
| Custodial | Yes | No |
| Checking | Yes | No |
| Savings | No | No |
| Credit card | Yes | No |
Data sources: M1 Finance and Robinhood
READ MORE: Best Robo-Advisors
M1 Finance vs. Robinhood: Mobile app and trading platforms
M1 Finance offers a user-friendly platform to both desktop and mobile customers. It offers the typical portfolio holdings, trading activity, and transaction buttons. Plus, M1 Finance's platform stands out with a few features:
- Investors can rebalance their portfolio with the click of a button.
- Users can answer questions about financial goals to make more informed investment decisions.
- You can view an individual stock's weight and performance with an interactive, intuitive chart called "The Pie."
As one of the original investing apps, Robinhood has led the pack when it comes to streamlined simplicity. Robinhood's platform is so intuitive that some argue that it makes risky trading strategies too accessible. Beyond the traditional trading app trimmings, Robinhood provides its users with a newsfeed for a customizable list of stocks. Especially unique are the text-message-like announcements of IPOs, Robinhood updates, and transaction reports.
Both brokers offer a trading platform that is easy to use and visually stunning. And both platforms offer features you would expect including performance metrics, transaction history, and the ability to buy and sell assets. However, each offers a unique spin on the traditional broker's platform.
Final take
When it comes to M1 Finance vs. Robinhood, both brokers boast strengths and weaknesses. Finding the best online stock broker for you largely depends on what you value as an investor:
- Robinhood is a strong contender for an active investor who wants to trade options or cryptocurrencies.
- M1 Finance stands out for a passive investor who seeks to invest, borrow, and bank all under one roof.
If you are an investor seeking a slick platform for trading stocks and ETFs without paying high fees, either of these brokers may be a good choice, depending on your investing needs.
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Our Brokerages Expert
Charlie Pastor, CFP® is a full-time financial planner dedicated to overserving the underserved. He has a degree in Finance, Accounting, and Personal Financial Planning from the University of Colorado Boulder. His professional experience includes founding a Registered Investment Advisor firm dedicated to serving young professionals. Outside of writing for The Ascent, Charlie enjoys serving as political advocacy chair for the Financial Planning Association of Colorado.
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Robinhood disclosure
All investments involve risk and loss of principal is possible.
Securities are offered through Robinhood Financial LLC, member FINRA/SIPC. Cryptocurrency services are offered through an account with Robinhood Crypto, LLC (NMLS ID 1702840). Robinhood Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency held through Robinhood Crypto is not FDIC insured or SIPC protected. For more information see the Robinhood Crypto Risk Disclosure.
Trades of stocks, ETFs and options are commission-free at Robinhood Financial LLC. Other fees may apply. Please see Robinhood Financial’s Fee Schedule to learn more.
Fractional shares are illiquid outside of Robinhood and are not transferable. Not all securities available through Robinhood are eligible for fractional share orders. For a complete explanation of conditions, restrictions and limitations associated with fractional shares, see the Fractional Shares section of our Customer Agreement.
Robinhood Gold is an account offering premium services available for a $5 monthly fee. Not all investors will be eligible to trade on Margin. Margin investing involves the risk of greater investment losses. Additional interest charges may apply depending on the amount of margin used. Bigger Instant Deposits are only available if your Instant Deposits status is in good standing.