M1 Finance Review: Invest, Spend, and Borrow for Less

M1 Finance Review_picture of dollar bill puzzle

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M1 Finance offers automated investment portfolios with no trading fees or commissions, an interest bearing spending account, and low-interest borrowing options. We review the pros and cons below!

Investing is a very personal thing. Some people favor automating their contributions while 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 a custom portfolio but don’t want to start actively trading, M1 Finance may be the solution for you. Let’s review the key features of M1 Finance and explore the program’s pros and cons.

M1 Finance Logo

M1 Finance: At a Glance

  • Investing, borrowing, and cash management platform
  • No trading fees or commissions
  • $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 that is available on the web and as a mobile app. It automates the investing process by helping you build a custom portfolio without the hassle of managing your own trades. Even better, there are no trading fees or commissions to worry about.

Additionally, M1 Finance offers a free checking account with debit card access and the ability to borrow against your portfolio. Standard use of the platform is free. However, M1 also offers a paid subscription that comes with investing perks, a lower interest rate when you borrow, and a premium cash back, interest-bearing checking account. A rewards visa card will also be available to M1 Plus customers in the near future.

How Does M1 Finance Work?

With M1 Finance, you get access to automated investing in individual stocks and exchange-traded funds (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 might sound 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 Finance also 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.

M1 Finance Fees

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.

So, how do they stay in business? M1 Finance 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 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 fees — 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.

Top Features of M1 Finance


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

Choosing your own stocks and funds typically means placing (and paying) for trades. At M1 Finance, however, 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 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).Of course, setting a schedule automates your investing, 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 trades for M1 Plus subscribers 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.

Start Investing with just $100 – With M1 Finance, you can start investing with as little as $100. Plus, you won’t pay trading or commission fees. Learn more here.


Borrowing from your portfolio is a quick and easy way to access credit without having to go through the sometimes-arduous process of applying for a loan. Once you have $5,000 invested with M1 in a taxable account, you are eligible for a flexible line of credit against your portfolio. Borrowing from a from an IRA, custodial, or trust account is not allowed.

You can borrow up to 35% of your balance at a competitive variable rate. Free accounts can currently borrow at a variable rate of 3.5% while M1 Plus customers get a 2% variable rate.

Your credit line is automatically available once your portfolio balance reaches $5,000. You can access those funds anytime, and you only pay interest on what you use, billed at the end of that month.

Screenshot of M1 Borrow rates compared to competitor rates

The borrow feature allows fast access to cash for paying off high-interest debt, paying down a home equity loan, or even for large expenses like starting a new business. Some people also use it to leverage their investment accounts. 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 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 users with free accounts receive one ATM fee reimbursement every month. (M1 Plus customers receive 4 monthly ATM reimbursements.)

There are no monthly fees, no transaction fees, and no minimum balance. Free accounts are subject to a foreign transaction fee of 0.8-1.0% while M1 Plus customers are not. M1 Plus users also earn 1% cash back on qualifying purchases and 1% APY on money held in their account.

M1 Credit

The new Owner’s Rewards Card by M1 (coming soon!) allows users to earn cash back on purchases and automatically reinvest their cash back into their investment accounts. This Visa Signature card earns very respectable cash back rates, and the sleek metallic design makes it attractive to carry, as well.

Cardmembers will earn between 2.5% and 10% cash back on purchases at dozens of select retailers. Some retailers include Amazon (2.5% cash back), Starbucks (5% cash back), Delta Airlines (5% cash back), and Netflix (10% cash back). Purchases made at non-participating retailers still earn a nice 1.5% cash back.

Again, cash back earned on the card is automatically reinvested into your investment portfolio, allowing you to grow your wealth through the purchases you make every day. We think it’s a really interesting concept which M1 users will likely love.

M1 Plus

As we’ve mentioned, M1 is a free platform with an optional paid subscription called M1 Plus. The annual subscription fee for M1 Plus is $125.

So, what does that annual fee buy you? On the investment side, subscribers get to capitalize on a second daily trading window. Borrowers also will enjoy a 1.5% 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
  • 1% APY on your account balance, paid monthly
  • Four ATM fees reimbursed every month
  • A fancy tungsten ATM card

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 cash back credit card, you may not get a great value from the paid account.

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. You can even skip customizing your portfolio by choosing one of M1’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 trading fees or commissions.
  • People Interested in Cash Back: The new M1 Owner’s Rewards Card earns up to 10% cash back at select retailers. The M1 Plus spending account also earns 1% back on all your debit card purchases and 1% APY on your account balance.
  • Investors Who Don’t Have the Capital to Buy High-Value Stocks: M1 Finance allows you to invest in fractional shares so you can afford to purchase share in almost any stock.

Who Should Avoid M1 Finance?

  • Non-U.S. Residents: At this time, M1 Finance is only available to U.S. citizens and residents.
  • Active Traders: 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: Final Thoughts

M1 Finance is an attractive solution for investors who want to customize their portfolio without the hassle of trading stocks. The borrow and banking features are also nice perks.

M1 Finance Review Pin - picture of dollar bill puzzle

M1’s automated 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 – M1 Finance offers automated investing with no trading fees or commissions and a debit card that earns 1% cash back. Get started here.

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