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M1 Finance Review: Free Trading with No Commissions

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Investing can be a very personal thing. Some people favor the set-it-and-forget-it approach of automating contributions to a mutual fund or exchange-traded fund (ETF). Others get a thrill from choosing their own stocks and timing their own trades. But what if your preferences are somewhere in-between?

If you’d like to build your own custom portfolio, but don’t want to spend time or money trading, M1 Finance may be the solution for you. Let’s take a look at how M1 Finance’s key features work.

Start Investing for Free – M1 Finance offers investing options with no trading fees or commission fees.  Plus you only need $100 to get started. Learn more here.

M1 Finance at a GlanceM1 Logo

  • Investing, borrowing, and cash management platform
  • No trading fees or commission
  • $100 minimum balance for taxable accounts and $500 minimum for retirement accounts
  • Borrow up to 35% of your portfolio at a competitive interest rate
  • Free FDIC-insured checking account with debit card access
  • Paid subscription with premium perks available

What Is M1 Finance

M1 Finance is an investing, borrowing, and cash-management platform available on the web and as a mobile app. It automates investing by helping you build a custom portfolio without the hassle of managing your own trades.

M1 offers a free checking account with debit card access and the ability to borrow against your portfolio. Standard use of the platform is free, but M1 also offers a paid subscription that comes with investing perks, a lower borrow rate, and a premium cash back, interest-bearing checking account.

How Does M1 Finance Work?

With M1 Finance, you get access to automated investing in stocks and ETFs without the trading fees. You can build a custom portfolio by selecting your own stocks or funds and specifying how you want them allocated. That sounds complicated, but M1’s simple, pie-based visual makes it easy. Your portfolio is a pie, and the stocks and ETFs you choose are the slices.

For example, if you decide to invest in five stocks and want them all equally represented in your portfolio, your pie will look like this:

M1 Finance Review Pie Chart Example

Twenty percent of every automatic contribution would be allocated to each stock. If you want to buy or sell from a specific slice of your pie without touching the others, you can submit a separate buy or sell order.

You can open up to five accounts, and each can hold multiple pies.

The custom pie-based portfolio is intuitive and easy, but if you want to go even easier, you can choose from one of M1 Finance’s ready-made pies. There are more than 80 options, so hands-off investors have plenty of selection.

M1 makes investing easy with automatic contributions and dynamic rebalancing. You can connect your bank account, set an investing schedule, and walk away. M1 Finance will invest your scheduled contributions according to your pie, and if your holdings start to drift out of alignment with your pie, it will fix (rebalance) them.

M1 makes investing accessible by offering fractional shares. This means you can purchase a portion of a stock or ETF that would otherwise be beyond your price range. That’s possible because M1 breaks every share into 100,000 pieces. So if you can afford to buy 1/100,000th of a share, you can hold it in your portfolio.

How Much Does M1 Finance Cost?

M1 Finance’s investment platform is free to use, and there are no trade fees or commissions.

How is that possible? As I mentioned before, M1 aggregates trades, executing them all at once. That drastically cuts down on the number of trades, eliminating the need for a trading fee.

It also makes money though its borrowing platform, which charges a variable interest rate. Additionally, users who subscribe to M1 Plus pay a platform fee in exchange for additional perks.

You do pay regulatory fees when you sell a stock, but they are quite minimal. These are called the Security Exchange Commission Fee and the Trading Activity Fee. However, they aren’t on the same level as typical trading theses — they’re much lower.

There are also fees for special services, such as overnight mailing a paper copy of a statement. See the full list of fees and calculations here.

Start Investing with just $100 – With M1, you can start investing with as little as $100. And your money will go further because you won’t pay trading or commission fees. Learn more here.

Top Features of M1 Finance


Investing is M1’s primary focus, and its set-it-and-forget it approach makes it incredibly simple.

While choosing your own stocks and funds typically means placing (and paying) for trades, M1 Finance’s fractional shares and automated, aggregate trading means you don’t have to bother with either.

Your only jobs are to design your portfolio using the pie (or choose a ready-made option), connect your bank account, and set your investing schedule. If that sounds like a lot, keep in mind that it’s all up-front work. Once it’s done, you enjoy the benefits of regular investing in your choice of securities without the hassle of actively managing trades.

Note that you don’t have to set an investing schedule. You can make deposits to your portfolio anytime by manually transferring money from your bank. You can also place manual buy and sell orders for specific slices of your pie (for example, if you only wanted to sell one type of stock). It’s just that setting a schedule automates your finances, and that means less work for you.

Trades are executed during two windows, one in the morning and one in the afternoon. Free M1 Finance users get access to the morning window, while M1 Plus subscribers’ trades are executed during both timeframes.

Individual, joint, retirement, and even trust accounts are available through M1. You need just $100 to get started with a taxable account and $500 for a retirement account.


Once you have $10,000 invested with M1, you become eligible for a flexible line of credit against your portfolio. You can borrow up to 35% of your balance at a competitive variable rate: 2% more than the current Federal Funds rate. Right now, that’s 3.75 percent. You can borrow from any account type except an IRA.

Borrowing from your portfolio is a quick, easy way to access funds without having to go through the sometimes-arduous process of applying for a loan. Your credit line is automatically available once your portfolio balance reaches $10,000. You can access those funds anytime, and you only pay interest on what you use, billed at the end of that month.

But why would you pay interest to access your own money? That’s an excellent question, and in many situations, it probably doesn’t make sense. However, there may be times when you need short-term access to funds and would prefer to pay the interest than sell off your securities and trigger tax consequences. One example might be an unexpected bill that arises a few days before you get paid.

Some people also use the borrow feature to leverage their account. This means that they borrow money from their portfolio and invest it again, hoping they’ll earn more on the investment than they pay in interest, resulting in a profit. That’s risky business, so proceed with caution if you’re considering this strategy.

If you do decide to borrow from your portfolio, repayment is easy and flexible. There is no payment schedule; you can carry a balance for as little or as long as you like; and payments can be any size. Payments come from your cash account, or if you don’t have cash available, from selling off some of your portfolio holdings.


M1 also functions as a digital bank, offering a free FDIC-insured checking account furnished by Lincoln Savings Bank. The account comes complete with a plastic debit card and one ATM fee reimbursed every month. There are no monthly fees, no transaction fees, and no minimum balance. There is, however, a 1% foreign transaction fee if you use your card outside the U.S.

M1 Plus

M1 is a free platform with an optional paid subscription called M1 Plus. The annual subscription fee for M1 Plus is $125. And what does that buy you? On the investment side, subscribers get to capitalize on a second daily trading window. Borrowers enjoy a 0.25% rate reduction, meaning they pay less interest.

But the checking account is where you find the most significant benefits of M1 Plus, including:

  • 1% cash back on all purchases made with your debit card
  • 5% APY paid monthly
  • Four ATM fees reimbursed every month
  • A fancy tungsten ATM card

So if M1 Plus costs $125 a year, you only need to spend about $1,050 a month to earn enough cash back to break even. Any more than that, and you’re earning money. And that’s not even accounting for the interest you earn on your balance or the money you can save with the additional refunded ATM fees.

The M1 Plus checking account is surprisingly appealing. Off the top of my head, I can’t think of another bank account that pays an attractive interest rate and offers cash back. The thing to keep in mind, though, is that it’s only a good move if you’ll use your debit card a fair bit. Remember, there’s a $125 annual fee. If you prefer cash or already have a favorite credit card, you won’t get good value from the paid account. Don’t be sucked in by the tungsten ATM card!

Who Should Consider M1 Finance?

  • Hands-off Investors: M1 is an excellent option for investors who want to set it and forget it. Simply build your pie, connect your bank account, and set an investing schedule. M1 will invest your money according to your directions automatically. Easy breezy! You can even skip customizing your portfolio by choosing one of M1 Finance’s ready-to-go options.
  • Fee-Conscious Investors: If paying a trading fee makes you cringe, M1 Finance might be for you. Its aggregate approach to trading means there’s no need to charge customers a fee. It also means your trades will only be made once a day, which means you can’t time the market accurately. But the style of investing that M1 promotes — regular and consistent — isn’t based on timing the market, anyway.
  • People Interested in Cash Back But Not in Credit Cards: There are a myriad of cash back credit cards out there, but few bank accounts. If you’re anti-credit card, that usually means you miss out on those rewards. With the M1 Plus checking account, you earn 1% back on all your debit card purchases. Just be sure to check the math on your spending habits, because there is a $125 annual fee to consider.
  • Investors Who Don’t Have the Capital to Buy High-Value Stocks: When choosing your own stocks, it can be frustrating to discover that some of the ones you’d like to buy are out of your price range. You may want to invest in Amazon, but not even have enough to buy one share. With M1, that’s not a problem since it splits shares into 100,000 pieces. You can afford to buy 1/100,000th of virtually any share.

Who Should Avoid M1 Finance?

  • Non-U.S. Residents: At this time, M1 Finance is only available to U.S. citizens and residents.
  • Hands-On Investors: Investors who relish choosing their own stocks and making their own trades only get half the experience with M1. If you like to be in control of exactly when you place a buy or sell order, or if you like to set parameters for your trades, M1 won’t meet your needs.

M1 Finance Review: Conclusion

M1 Finance is an attractive solution for investors who want a customizable portfolio without the hassle of trading stocks. The borrow and banking features are nice, but probably not what draws customers in.

M1’s automated, aggregated trading and dynamic rebalancing make it a great fit for anyone who wants to build an investment portfolio, set an investing schedule, and then forget about it. Fractional shares make investing in a wide variety of stocks and funds accessible even to those with very small starting balances. Best of all, M1 is basically free, with an optional paid subscription.

M1 is less suitable for investors who want total control of the process. If that sounds like you, an online broker is probably a better fit.

Have you tried M1 Finance? What’s your take?

Investing and Banking Made Easy as Pie – M1 Finance offers investing options with no trading fees or commission fees and a debit card with 1% cash back. Get started here.

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