Updated May 9, 2023

M1 Finance Review: Pros and Cons

Read more about M1 Finance
Ad Disclosure: This article contains references to products from our partners. We may receive compensation if you apply or shop through links in our content. You help support CreditDonkey by using our links. (read more)

M1 Finance lets you invest in stocks and ETFs without fees. But is it safe? Find out the pros and cons, and if it's legit.

M1 Finance Promo Code
M1 Investment Account - Up to $500 Bonus

Overall Score


Annual Fee


Minimum Deposit


Customer Service


Mobile App


Ease of Use



5-point scale (the higher, the better)

Pros and Cons

  • Choose your own investments
  • Can invest in individual stocks
  • No account fees
  • No research
  • No human advisors
  • Can only trade once a day

Bottom Line

No-fee robo-advisor that allows you to choose your own investments

If you want to be hands-off, but still with a say in your investments, M1 Finance may perfectly bridge the gap between robo and DIY investing.

It stands out from other robo-advisors by letting you create and customize your own portfolio. Then the automated service will manage your account.

And what's more? It's free to use. There are no commission or management fees.

Does its service live up to what it promises? Keep reading to find out.

What is M1 Finance: Overview

M1 Finance offers 3 main services:

  • M1 Invest: Build your own portfolio with stocks & ETFs or invest in premade portfolios. M1 will manage all of it for you. You get to choose exactly how much control you want over your investments.

    There are no trade fees or management fees. Get started today with just $100 ($500 for retirement accounts).

  • M1 Spend: A cash management account that comes with a free debit card. There is no minimum balance requirement.

  • M1 Borrow: A loan service that lets you borrow up to 40% of your portfolio's value at a low interest rate.

M1 also offers a premium M1 Plus membership for $95/year. Extra benefits include interest on your M1 Spend balance, cash back on debit purchases, lower M1 Borrow loan rate, and an extra afternoon trading window.

Who M1 Finance Best For

  • DIY investors. M1 gives you the best of both worlds. You can customize your portfolio and invest in any individual stocks and ETFs you wish. M1 manages it all for you.

  • Set it and forget it investors. You can set up an auto-invest schedule. M1 will withdraw the funds from your bank account and invest them automatically according to your portfolio.

  • Beginners. If you don't know what to invest in, M1 Finance has over 80 pre-built portfolios by experts. You can simply select one (or more) of those.

  • Long-term investors. It's not for day traders or frequent traders, as M1 only trades once a day.

Pros & Cons


  • Create custom portfolios with robo management
  • Just $100 to start
  • $0 commission or management fees
  • Buy fractional shares
  • Rebalances your portfolio for you
  • Pre-made portfolios created by M1's experts
  • Borrow against your portfolio balance
  • See M1 Finance Deal >>


  • Learning curve to create pies
  • No human financial advisors
  • No tax loss harvesting
  • Only offers stocks and ETFs
  • No cryptos, options, or mutual funds
  • Only one trading window per day

Read on to learn more about M1 Finance in detail.

How M1 Finance Works

© CreditDonkey

M1 Finance allows you create a super customized portfolio. This may be a bit overwhelming at first, but the process is straightforward.

Here is how M1's Pie investing works:

1. Create Your Investment Portfolio

M1 lets users build what they call "Pies." Your Pie is a visual representation of your portfolio. Each Pie can consist of up to 100 "slices", or investments. Each slice can be a stock, ETF, or even another Pie.

You can invest in more than 6,000 stocks and ETFs listed on NYSE and the NASDAQ exchanges. This is different from other robo-advisors, which don't let you choose individual stocks.

An investment portfolio is a basket of different assets, like stocks, bonds, and more. Just like the saying "don't put all your eggs in one basket," It's important to diversify your portfolio so you spread out the risk. If one investment doesn't do well, you still have others, so you don't lose too much. If you're new to investing, one popular approach to take is the Modern Portfolio Theory.

You set the percentage for each slice. For example, if you want 10% of your investment to be in Apple, that will be 10% of your Pie.

screenshot from m1finance.com

What is your biggest concern about investing?

If you're not sure what to invest in, you can invest in one of the 80+ prebuilt Pies created by their experts. You can also add Expert Pies as slices into your custom portfolio.

M1's Expert Pies portfolios are built around the following themes or goals:

  • General Investing: Portfolio is based on your risk tolerance
  • Plan for Retirement: Portfolio will adjust to your goals as you age
  • Responsible Investing: Socially responsible portfolio
  • Income Earners: More focused on dividends and income returns
  • Hedge Fund Followers: Mimics the investment strategies of reputable hedge funds
  • Stocks & Bonds: Just two ETFs; focuses on stocks and bonds
  • Other Strategies: Additional investment strategies.

You can create multiple pies to meet your different financial planning goals. Each additional pie appears as a slice of your overall pie.

2. Fund Your Account

When you transfer money to your account, M1 Finance will automatically buy shares of your investments according to the percentages you set.

Using the above example, you've set 10% of your pie for Apple. If you add $1,000 to your portfolio. M1 would use $100 to purchase Apple stocks.

You can also set up automatic contributions if you want to "set it and forget it". M1 will withdraw the funds from your linked bank account and invest accordingly.

3. Modify Your Pie

You can make changes to your Pies at any time. Simply remove a slice if you want to sell an investment. Add another slice to invest in something new.

screenshot from m1finance.com

It's super simple. You don't have to worry about the trading yourself.

M1 will also rebalance your portfolio as needed. Keep reading to learn what this means and other features.

See Current Offer >>

Does M1 offer tax loss harvesting?
M1 Finance does not offer tax loss harvesting, but it does use tax minimization when selling securities. When you request a withdrawal, M1 will sell securities in an order to help reduce the amount of taxes you'll owe. Losses that offset future gains will be sold first.

Portfolio Features

Here are some advantages of M1's investing service:

Portfolio Rebalancing

© CreditDonkey

Overtime, your pie may shift from what you originally set. Investments that do well will grow, while slices with losses will shrink.

Let's say your pie has 2 investments. 50% is a high-risk stock and 50% is a low-risk bond. But after some time, the high-risk stock does well and accounts for 65%. Now, your portfolio is more risky.

To stay at the same risk level, you'll have to rebalance your portfolio. This means bringing it back to 50/50.

With a DIY broker, you have to rebalance yourself. This means calculating how much to buy or sell for each investment. And then manually placing the trades. Imagine if you have multiple stocks. It can be very time-consuming and confusing.

M1 Finance uses dynamic rebalancing to keep your portfolio on target. You start by choosing your target asset allocation. Then if that changes, M1 will rebalance your portfolio little by little when you add or withdraw funds.

For example, if you have an asset that's overweight, M1 will buy less of it when placing trades. This will bring your portfolio back to your original percentages.

Anytime you want to rebalance your portfolio, you can also just click "Rebalance" on your portfolio dashboard. M1 will then buy and sell investments accordingly at the next trade window.

Fractional Shares

You can buy just a small fraction of a stock if you don't have enough for a full share. This means that every penny is invested. You won't have any uninvested cash sitting around.

For example, Stock A costs $500 per share, but you only have $100 to invest. M1 will just purchase $100 worth of Stock A for you (1/5 of a share).

Tax-Efficient Investing

© CreditDonkey

When you withdraw funds from a taxable account, any gains will be taxed. M1 has a built-in tax efficiency strategy to help reduce taxes as much as possible, so you can keep more of your money.

When you request a withdrawal, M1 will sell securities in order of priority, based on how they affect taxes:

  1. Losses are sold first, as this reduces your gains
  2. Long-term gains, as they're taxed at a lower rate
  3. Finally short-term gains are sold last because these are taxed at the highest rate

Long term investments held for more than a year have lower tax rates (0%, 15%, or 20% depending on your tax bracket). Investments held for less than a year can be taxed at as high as 37%. So short-term investments are only sold as a last resort.

Dividend Reinvestment

M1 Finance automatically reinvests your dividends once they reach $10. This helps increase your earnings. Your dividends will buy more shares, which will generate more returns.

Dividends are reinvested back into the entire pie (as opposed to back into the specific stock). So if you have $20 worth of dividends, that'll be split up among all your investments.

How to Get Started

Getting started with M1 is different than with other robo-advisors. You won't see the typical questionnaire about your risk tolerance, goals, net worth, and income.

Here are the steps to create an M1 investment account:

  1. Sign up. At this stage, you only need your email address and a password.

  2. Create Pie. The system will guide you through your first practice pie.

  3. Open official account: You'll need to verify your identity via your phone number. Then you'll officially sign up with your personal information (name, address, birthdate, and Social Security number).

  4. Select account type. You can select from an individual taxable account, joint, IRAs (Traditional, Roth, or SEP), and Trust. After this, go on to create your pie(s)

  5. Fund account. You'll need to link a bank account to fund your account.

And that's it. Once the funds are transferred, M1 will do all the work. M1 will buy the investments for you according to your Pie. You can make changes at any time.

Test Before Using

You have to register for an M1 account with your email. However, you have time to play around with the pie system before opening an official account. Here's what it'll look like:

Once you sign up, the tutorial starts. M1 will ask you to pick at least 3 investments to start your pie. It has a list of popular stocks, funds, and Expert Pies. Or you can enter a specific stock in the search.

After you've chosen some investments, it's time to set the percentages. As default, your investments are equally weighted. You can change the numbers.

When you're happy with your pie, hit continue. M1 will come up with a projection of how well this portfolio would have done.

After this, you can go on to officially open your account with a phone verification and personal info.

M1 Platform and App

M1 Finance is strictly an online program. You can access the platform via your PC or the mobile app. It's available for both iOS and Android devices.

The platform itself is very user-friendly. You'll see a summary of your portfolio including its value, gain or loss, and return.

screenshot from m1finance.com

If you want to edit your Pie, simply press the "edit" button. You'll be taken to a page where you can change the target percentages and add or delete slices. M1 Finance will automatically readjust as you do so.

screenshot from m1finance.com

To add a new investment, just click on the "add" button. This will take you to the "Research" tab where you can search for any stock on the major U.S. stock exchanges.

screenshot from m1finance.com

To get more information about a certain stock, just click on it to find the stock's performance data, price history, and more.

screenshot from m1finance.com

Overall, the platform is very easy to navigate and creating the pies is intuitive. The mobile app is an excellent companion and works pretty much the same way.

When does M1 Finance trade?
Free M1 users have one trading window at 9:30 am ET when the New York Stock Exchange is open. Having only one trading window helps keep M1 free for users.

M1 Plus members with at least $25,000 in their account have access to another trading window at 3:00 pm ET. If you're looking to stay more up to date with your investing, it may be worthwhile to become a Plus member.


M1 is pretty close to being free to use. M1 charges:

  • No account opening fees
  • No trade fees
  • No management fees
  • No deposit or withdrawal fees to/from your linked bank

(Compare plans)

There are some services that may cost you. For example, they will charge you for an account statement or wire transfer. M1 is transparent with their fees, as you can see here.

And there is a $20 inactivity fee for any account with less than $20 and no activity for 90 days.

If you invest in ETFs, you will also pay fees called expense ratios. This is the operating cost of the fund, such as for administration, compliance, marketing, etc. M1 has no control over these fees and does not profit from them. Expense ratio fees are deducted directly from the funds.

M1 Plus: Premium Account
M1 Plus is an optional premium membership. This has a fee of $95 per year. It includes extra perks such as:

  • An extra afternoon trading window for accounts $25,000+
  • Interest on your M1 Spend balance
  • Cash back on debit card purchases
  • Lower M1 Borrow loan rate

How does M1 Finance make money if it's free to use?
  • From the premium M1 Plus membership.
  • When users make purchases on the M1 Spend debit card.
  • Charging interest on loans from M1 Borrow.
  • Lending shares (to short sellers and earning a small profit from this).
  • Earning interest from the uninvested cash in your account (instead of giving the interest to you).

M1 Borrow

Imagine if you need some money for a large purchase, like for a house down payment, upcoming wedding, or kitchen remodel.

Normally, you can either save up, get a loan (which is a hassle), or sell off some of your investments. But that'll knock you off track, not to mention having tax consequences.

M1 Borrow provides a super simple and low cost way to borrow money. You can borrow up to 40% of your portfolio balance at an interest rate much lower than traditional loans. This allows you to get access to funds while staying invested.

M1 Borrow is a margin account as well. You could use these loans to invest more. These are called margin loans. If the interest rate is lower than the rate of return, then this can be highly profitable. But you also risk losing more. This is an advanced trading strategy that new investors should avoid at first.

Other benefits include:

  • Get a loan instantly with no credit check
  • No payment schedule; pay back on your terms

The only requirement is that you have a taxable account with at least $5,000 balance (retirement and custodial accounts don't qualify).

If used responsibly, M1 Borrow can be a convenient tool to borrow money quickly without affecting your credit. However, there is still interest, so be sure to pay it back as soon as possible.

You can even use your M1 Borrow loan to buy more investments in your M1 portfolio (this is called trading on margin). This increases your buying power, but this could be very risky too. If you have any losses, your losses will be multiplied.

M1 Spend

M1 Spend is M1's cash management account. It's available to all users at no cost. There is no monthly service fee or minimum balance requirements.

It's a very basic checking account, but could be a good option if you want to manage your banking and investments all in one place.

One benefit is that it integrates with your other M1 accounts. It can detect extra cash and automatically move it into your M1 portfolios to be invested. Transfers between your M1 accounts usually take just 1 business day.

Features include:

  • Free debit card
  • Direct deposit
  • Online bill pay
  • One ATM fee reimbursed each month

For M1 Plus members, you get 1% cash back, and ATM fees reimbursed 4x monthly. But the $95/yr membership price is expensive, and may not be worth it just for these banking perks.

Another drawback is that M1 doesn't have an ATM network. And it only reimburses one ATM fee per month for a standard account. So it may not be ideal as your primary checking account.

M1 Spend is partnered with Lincoln Savings Bank to provide FDIC insurance up to $250,000.

SIPC vs FDIC insurance:
SIPC protects your assets in a brokerage account (like stocks, bonds, and mutual funds). FDIC protects your assets in a bank account (like money in checking and savings accounts). They're two different agencies, but both are there to protect your money in case the firm fails.

Compare Robo-Advisors


  • Learning curve. While the platform is straightforward, creating the pies may take some time to learn.

    If you want a platform that will do all the work for you, other robo-advisors may be a better choice.

  • No human financial advisors. While you can ask customer service reps about your account, they are not licensed financial advisors who can offer investment advice.

  • Can only trade once per day. M1 offers only one trading window at 9:30 am ET (everyday the New York Stock Exchange is open). This is how M1 keeps the platform free for investors. M1 is not for active day traders.

  • Limited investment options. M1 only offers stocks and ETFs - no mutual funds, options, or cryptocurrencies.

  • No tax loss harvesting. While M1 does tax-efficient trading, it doesn't offer tax loss harvesting, which is a standard feature for many robo-advisors.

Is M1 Finance a robo-advisor or an online brokerage?
M1 Finance is a hybrid brokerage and robo-advisor. Like DIY brokers, you have complete control of your investments. And like robo services, M1 executes the trades for you and rebalances your portfolio with their automation tools.

Is M1 Finance Safe?

M1 is a safe investment robo-advisor with reliable customer service for beginners. The investment platform gives you control over your money as you save for the long term. It's a registered broker/dealer with FINRA (CRD #281242) and a member of SIPC. You can have peace of mind that your assets and information are secure with M1.

  • SIPC Insured. SIPC is a federal corporation that protects your securities up to $500,000 per account if the brokerage goes out of business. SIPC does NOT protect you from losing money through investing.

    M1's clearing firm also has supplemental insurance to over beyond the SIPC limits.

  • Military-grade encryption. All data transferred and stored within M1's system is protected with 4096-bit encryption.

  • Extra login security M1 uses two-factor authentication and fingerprint ID/face ID login to keep your account secure.

Is M1 Finance FDIC insured?
M1 Finance is not a bank so it is not FDIC insured. However, the SIPC would cover your losses (up to $500,000 per account) should the platform go out of business. Keep in mind that SIPC does not protect against investing losses.

M1 Finance's banking account (M1 Spend) provides FDIC insurance up to $250,000 through Lincoln Savings Bank.

How It Compares

M1 vs Betterment:
Betterment is often the robo-advisor of choice for beginners. It's completely hands-off. It chooses investments for you according to your risk level. Unlike M1, you don't have the ability to buy individual stocks.

There is no minimum investment. The annual management fee is 0.25% based on assets under management.

Betterment also offers a premium account option for those with $100,000+. This gives you unlimited access to financial professionals. They can provide guidance on life events and other investments.

M1 vs Robinhood:
Robinhood is a basic online brokerage that offers commission-free trades. It's completely DIY. You're in charge of making trades and managing your own portfolio.

Robinhood offers more investment options. You can trade stocks, ETFs, options, and cryptocurrencies.

Robinhood is better for active traders. You get free extended trading hours from 7:00 am to 8:00 pm. And certain accounts even allow for unlimited day trades.

M1 vs Acorns:
Acorns is a spare change robo-advisor. It's geared towards beginners who have trouble saving. You link up your cards and it automatically rounds up your purchases and invests the change into diversified portfolios.

M1 has no account fees, while Acorns does have a $3 monthly fee for the basic investing account.

M1 vs Wealthfront:
Wealthfront is another completely hands-off robo-advisor. You don't get to choose individual stocks. It charges a 0.25% annual fee and has a $500 minimum investment.

One disadvantage of Wealthfront is that it doesn't support fractional shares. So you could just have uninvested cash sitting around. But it does offer automatic tax loss harvesting.

Wealthfront also has a college 529 savings plan, which can be beneficial for parents saving for college.


Can I use M1 Finance outside US?
No, M1 Finance is only available to US citizens and permanent residents over 18. You must have a US residential address and US phone number. M1 Finance does not let you verify your account with a VOIP phone number.

Can I hold cash in M1 Finance?
By default, M1 Finance automatically invests any idle cash in your account (over $25). But you can set a custom minimum cash balance, if you want to hold a certain amount of cash.

If you turn off Auto-Invest, M1 Finance will never automatically invest cash. So you can hold as much cash balance as you want.

Does M1 Finance automatically buy?
With Auto-Invest (which is the default setting), M1 Finance automatically buys shares according to your portfolio whenever you deposit money.

You can even set up an auto-transfer schedule from your linked bank account. Every time there's a transfer, M1 Finance will automatically buy more shares.

Does M1 Finance have cryptocurrency?
No, M1 Finance does not offer direct investing in cryptocurrencies. You can only invest in crypto-related stocks.

Does M1 Finance have options?
No, M1 Finance does not offer options.

Does M1 Finance have limit orders?
No, M1 Finance does not have limit orders or other advanced orders. It's not meant for active trading. M1 is a long term investment platform for buy-and-hold investors.

How often can you buy and sell on M1 Finance?
M1 Finance only trades once a day at 9:30 am ET whenever the NYSE is open. M1 Plus members with at least $25,000 in their account get a second trading window at 3:00 pm ET.

Can I transfer my Robinhood account to M1 Finance?
Yes, you can transfer stocks from Robinhood to M1 Finance. You will need the most recent account statement from Robinhood. M1 does not charge a fee, but Robinhood charges a $100 fee to transfer assets out.

What the Experts Say

As part of our series on saving and investing, CreditDonkey asked a panel of industry experts to answer readers' most pressing questions. Here's what they said:

Bottom Line

M1 Finance is best for the DIY investor who also wants to be hands-off. You get to choose your own investments but don't have to handle tedious tasks, like performing manual trades and rebalancing (+1 for ease of use). It's also great that there are no trade or management fees.

However, it can take a little time to learn to create pies for beginners.

If you're not sure about making your own choices or you really just want the software to do the job for you, a different robo-advisor may be the better option for you. And if you're an investing expert looking for a wider variety of investment options, like mutual funds, you may want to look elsewhere, as well.

M1 Finance

M1 Investment Account - Up to $500 Bonus

Open a new M1 investment account. Deposit $10,000 or more into the account within 14 calendar days of account opening. Promotional credit will depend on the deposited value made into the account.

Deposited ValuePromotional Credit
$10,000 - $29,999.99$75
$30,000 - $49,999.99$150
$50,000 - $99,999.99$250

This offer is only for customers who have never registered for an M1 user account.

Expires 12/31/2023

$10 Investment Bonus

  • Open an Acorns account (new users only)
  • Set up the Recurring Investments feature
  • Have your first investment be made successfully via the Recurring Investments feature

Get up to 12 free fractional shares

Expires 6/30/2023
Get up to 12 free Fractional Shares when making an initial deposit of ANY AMOUNT! Each is valued between $3-$3000
  • Register and open a new account.
  • Then, deposit any amount to get 6-12 free fractional shares.

Sign Up and Get $5

  • Sign up, add at least $5 to your account and get a $5 bonus.
  • Invest with fractional shares
  • Get portfolio recommendations

Holly Zorbas is a assistant editor at CreditDonkey, a personal finance comparison and reviews website. Write to Holly Zorbas at holly.zorbas@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

Best Investment Apps

Best Investment Apps

Best Micro Investing App

Micro Investing App

The Best Way to Invest $100

How to Invest $100

Investing in Your 20s: Beginner's Guide

Investing 20s

Best Robo Advisor

Best Robo Advisor

How to Invest Money

How to Invest Money


Seeking Alpha Review

Seeking Alpha Review

Seeking Alpha eliminates the "guesswork from your investing decisions." But is it worth the subscription fee? Is Seeking Alpha right for you?

Next Page:

About CreditDonkey
CreditDonkey is a personal finance comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.

About Us | Reviews | Deals | Tips | Privacy | Do Not Sell My Info | Terms | Contact Us
(888) 483-4925 | 680 East Colorado Blvd, 2nd Floor | Pasadena, CA 91101
© 2023 CreditDonkey Inc. All Rights Reserved.