You’re researching automated investing platforms instead of just opening a Fidelity account and doing it yourself. That tells me something: you want the convenience of a robo-advisor, but you don’t want to hand over control of what you actually own.
M1 Finance claims to solve this tension. It’s a hybrid—part robo-advisor, part self-directed brokerage. You pick the stocks and ETFs. M1 handles the buying, rebalancing, and dividend reinvestment. With nearly a decade in operation, $12 billion in client assets, and over a million users, the platform has proven the concept works. But is it right for you?
Quick Verdict: Is M1 Finance Worth It?
Yes, for DIY investors who want automated execution of their own strategy. M1 Finance is free if you maintain $10,000+ in your account, offers 3.35% APY on uninvested cash, and provides margin rates at 5.90%—roughly half what Fidelity, Schwab, and E*Trade charge.
The catch: M1 doesn’t tell you what to buy. You build your portfolio (they call it a “Pie”), and M1 automates the execution. If you want someone else to make investment decisions, look at Betterment. If you want to pick stocks but hate the manual work of rebalancing and reinvesting dividends, M1 is built for you.
| Factor | M1 Finance |
|---|---|
| Best For | DIY investors who want automation |
| Price | $0/month ($10K+ balance) or $3/month |
| Cash APY | 3.35% |
| Margin Rate | 5.90% |
| Our Rating | 4.0/5 |
What Makes M1 Different: The Platform in Context
Most investing platforms force a choice. Traditional robo-advisors like Betterment manage everything for you—convenient, but you’re stuck with their portfolio. Self-directed brokerages like Fidelity give you full control—powerful, but every trade is manual.
M1 occupies the middle ground. You design your portfolio by selecting stocks, ETFs, or even crypto, then assign target percentages to each holding. M1 calls this a “Pie.” Once your Pie is set, M1’s automation takes over:
- Dynamic Rebalancing: When you deposit money, M1 automatically buys the holdings that are furthest below their target allocation
- Dividend Reinvestment: Dividends get reinvested according to your Pie structure
- One-Click Rebalancing: Sell overweight positions and buy underweight ones with a single tap
This matters because maintaining a portfolio is work. Without automation, you’d need to calculate which holdings are underweight, determine how many shares to buy, execute multiple trades, and repeat every time you add money. M1 handles all of that.
Try M1 Finance — Free With $10K+
What You Actually Get
The Core: Invest, Earn, Borrow
M1 integrates three financial services into one platform:
Invest — The brokerage. Commission-free trading of stocks, ETFs, and crypto. The Pie system for automated portfolio management. Available account types include individual, joint, custodial, Traditional IRA, Roth IRA, SEP IRA, and trust accounts.
Earn — A high-yield cash account paying 3.35% APY. Your uninvested cash earns interest while waiting to be deployed. FDIC-insured up to $4.75 million through partner banks.
Borrow — Portfolio line of credit at 5.90% (with a promotional rate of 4.40% for new borrowers). Requires $2,000+ in eligible securities. Available for individual, joint, and trust accounts—not retirement accounts.
The Pie System Explained
The Pie is M1’s signature innovation. Imagine your portfolio as a literal pie chart:
- Create Your Pie: Add stocks, ETFs, or crypto as “slices”
- Set Allocations: Assign target percentages (e.g., 30% VOO, 20% QQQ, 10% AAPL, etc.)
- Fund Your Account: Deposit money manually or set up recurring deposits
- Automatic Execution: M1 buys slices that are underweight to move toward your targets
- Rebalance When Needed: One click sells overweight and buys underweight positions
You can also use “Expert Pies”—pre-built portfolios designed by M1—or nest Pies within Pies for complex allocation strategies.
Tools and Resources
- Auto-Invest: Schedule recurring deposits that automatically invest according to your Pie
- Performance Tracking: Monitor returns against benchmarks
- Mobile Apps: iOS (4.7 rating) and Android (4.5 rating)
- Educational Content: Knowledge Bank articles, calculators, and blog
How M1 Finance Works: The Philosophy
M1 is explicit about their investment philosophy. From their mission page:
“We don’t believe in day trading or speculating as viable ways to build long-term wealth, so we didn’t build M1 to do that.”
This isn’t marketing speak—it’s a design decision. M1 uses trading windows rather than real-time execution. You can’t place limit orders or time your entries. The platform is engineered for investors who plan to hold for years, not traders looking to capture intraday moves.
The philosophy aligns with evidence-based investing: regular contributions, diversification, long holding periods, and minimizing costs. M1 automates the mechanics so you can focus on the strategy.
Pricing: The Real Cost of M1 Finance
The Fee Structure
| Tier | Monthly Cost | Requirements |
|---|---|---|
| Free | $0 | $10,000+ balance OR active M1 personal loan |
| Platform Fee | $3/month | Below $10,000 without qualifying loan |
The math: If you have less than $10,000, you’re paying $36/year. On a $5,000 portfolio, that’s 0.72% annually—more expensive than Betterment’s 0.25% AUM fee. On a $9,000 portfolio, it’s 0.40%. Once you cross $10,000, it’s free.
Other Fees to Know
- Trading: $0 for stocks and ETFs
- IRA Maintenance: $3/month (waived with $10,000+ total assets)
- Outgoing Transfer: $100 if you leave
- Crypto Trading: 1% built into execution price
- Mutual Funds: $20 per transaction (stick to ETFs)
The Margin Rate Advantage
Here’s where M1 shines. If you borrow against your portfolio, M1’s rates crush the competition:
| Broker | Margin Rate |
|---|---|
| M1 Finance | 5.90% (4.40% promo) |
| Fidelity | 11.75% |
| Schwab | 11.00% |
| E*Trade | 10.95% |
| Vanguard | 10.50% |
If you borrow $50,000 against your portfolio, M1 saves you roughly $2,500-$3,000 per year in interest compared to traditional brokers. That’s real money.
The Value Calculation
For investors with $10,000+:
- Cost: $0
- Cash APY: 3.35% ($335/year on $10,000 in cash)
- Automation Value: Hours saved on manual rebalancing
For investors under $10,000:
- Cost: $36/year
- Break-even: Does the automation save you more than $36 in time and missed opportunities?
The Trade-Offs: Pros and Cons
What M1 Does Well
Full Portfolio Control With Automation — You pick every holding. M1 executes your vision without you clicking “buy” dozens of times per month.
Competitive Cash Yield — 3.35% APY on uninvested cash is solid, especially with FDIC insurance up to $4.75 million.
Industry-Leading Margin Rates — At 5.90%, M1’s borrowing costs are roughly half what traditional brokers charge.
Clean Interface — The Pie visualization makes portfolio allocation intuitive. The mobile apps are well-designed.
Integrated Platform — Investing, cash management, and borrowing in one place reduces friction.
What M1 Doesn’t Do
No Stock Picking Guidance — M1 doesn’t tell you what to buy. If you want recommendations, see our Stock Advisor review for picks or Betterment for managed portfolios.
No Day Trading — Trading windows prevent real-time execution. This is by design, but it’s a dealbreaker for active traders.
No Options — If you trade options, M1 isn’t for you. Consider tastytrade instead.
$10K Threshold for Free — Below $10,000, you’re paying $36/year. That’s not outrageous, but it’s not truly free.
Limited Support — Email-only customer service. No phone support mentioned.
Who M1 Finance Is For
The Set-It-and-Forget-It DIYer — You know what you want to own. You’ve built your ideal portfolio on paper. You just need a platform that automates the execution so you’re not manually buying shares every paycheck.
The Portfolio Builder — You want to create a diversified portfolio of individual stocks and ETFs, not just buy a single target-date fund. The Pie system makes complex allocations manageable.
The Margin Borrower — If you borrow against your portfolio for a house down payment, business investment, or other purposes, M1’s 5.90% rate saves thousands compared to alternatives.
The Long-Term Investor — You’re measured in years, not days. You don’t need real-time execution because you’re not trying to time entries.
Who Should Look Elsewhere
Active Traders — Trading windows make M1 unsuitable for day trading or swing trading. Look at Interactive Brokers or thinkorswim.
Options Traders — M1 doesn’t offer options. tastytrade is built for options-first investors.
Hands-Off Investors — If you want someone else to manage your portfolio, Betterment handles everything for 0.25% AUM.
Small Account Holders Who Hate Fees — Under $10,000 with no plans to grow quickly? The $36/year fee might bother you. Fidelity offers free trading with no minimums.
Research Seekers — M1 doesn’t provide stock analysis or recommendations. Pair it with our Morningstar Investor review for research or our Stock Advisor review for picks.
Best Alternatives to M1 Finance
If You Want Fully Managed Investing
Betterment — 0.25% AUM fee, no minimum. They build and manage your portfolio. You answer questions about your goals, and Betterment handles the rest. Best for investors who don’t want to pick stocks.
If You Want More Trading Flexibility
Fidelity — Free trading, no minimums, full brokerage capabilities. You lose M1’s automation, but gain options trading, real-time execution, and excellent research tools.
If You Want AI-Powered Strategies
Composer — Build and automate custom trading strategies with no-code tools. More sophisticated than M1’s Pie system, designed for investors who want algorithmic execution.
If You Want Stock Recommendations + Execution
Combine Stock Advisor + M1 Finance — Get stock picks from our Stock Advisor review, build them into an M1 Pie, and let M1 automate the execution. Best of both worlds.
Final Verdict: Should You Use M1 Finance?
M1 Finance solves a real problem: the gap between robo-advisors that strip away control and brokerages that require manual execution. If you know what you want to own but don’t want to manage every trade, M1 is purpose-built for you.
The platform works best for investors with $10,000+ (free tier), a clear portfolio strategy, and a long-term horizon. The 3.35% cash APY and 5.90% margin rates are competitive advantages you won’t find elsewhere.
The platform doesn’t work for traders who need real-time execution, investors who want stock recommendations, or those who prefer fully managed portfolios.
With $12 billion in assets and over a million users, M1 has proven the hybrid model works. The question isn’t whether M1 is a good platform—it is. The question is whether you’re the type of investor it’s designed for.
If you want control with convenience, M1 Finance delivers. For a broader comparison of automated investing platforms, explore our guide to the best stock research websites.
Start Investing With M1 Finance
Frequently Asked Questions
Is M1 Finance worth the money?
Yes, for DIY investors with $10,000+. At that threshold, M1 is completely free while offering automated portfolio management, 3.35% APY on cash, and margin rates at 5.90%—roughly half what traditional brokers charge. Below $10,000, you’ll pay $3/month ($36/year), which may or may not be worth it depending on how much you value the automation.
What are the best alternatives to M1 Finance?
The best alternative depends on what you want. Betterment is better if you want fully managed investing (0.25% AUM, no stock picking). Fidelity is better if you want real-time trading and options. Composer is better if you want to build algorithmic strategies. M1 is best for investors who want to pick their own holdings but automate the execution.
M1 Finance vs Betterment: Which is better?
M1 Finance gives you full control over which stocks and ETFs you own, with automated rebalancing. Betterment manages your entire portfolio for you based on your goals. Choose M1 if you want to pick stocks. Choose Betterment if you want hands-off investing. For a detailed comparison, see our Betterment review. M1 is free with $10,000+; Betterment charges 0.25% annually regardless of balance.
How do I cancel M1 Finance?
You can close your M1 account by liquidating your holdings, withdrawing your cash, and requesting account closure through customer support ([email protected]). Note that outgoing account transfers cost $100, and IRA terminations cost $100. Accounts with less than $50 and 90+ days of inactivity may be closed automatically.
Is M1 Finance safe?
Yes. M1 Finance LLC is SEC-registered and a FINRA member. Securities are protected by SIPC up to $500,000. Cash in the Earn account is FDIC-insured up to $4.75 million through partner banks. The company has operated since 2015 and manages $12 billion+ in client assets. You can verify their registration at brokercheck.finra.org.
Does M1 Finance have hidden fees?
The main fee to watch is the $3/month platform fee if you have less than $10,000 in your account. Other fees include $100 for outgoing transfers, $20 per mutual fund trade, and 1% on crypto transactions. For most users who maintain $10,000+ and stick to stocks and ETFs, the platform is genuinely free.
Can I transfer my existing brokerage account to M1 Finance?
Yes, M1 Finance accepts ACATS transfers from other brokerages. You can transfer stocks, ETFs, and mutual funds directly without selling them, preserving your cost basis and avoiding taxable events. The transfer typically takes 5-7 business days to complete. M1 doesn’t charge incoming transfer fees, but your old broker may charge an outgoing transfer fee (commonly $50-$75). Once transferred, your holdings can be organized into M1’s Pie structure for automated rebalancing going forward.
Does M1 Finance offer a Roth IRA?
Yes, M1 Finance supports Roth IRAs along with Traditional IRAs, SEP IRAs, and rollover IRAs. You can apply the same Pie-based portfolio strategy to your retirement accounts with automated rebalancing and dividend reinvestment. The 2024 contribution limit is $7,000 ($8,000 if you’re 50 or older). Retirement accounts are subject to a $3/month IRA maintenance fee, but this is waived if you maintain $10,000 or more in total assets across all M1 accounts. Withdrawing from a Roth IRA before age 59½ may incur taxes and a 10% penalty on earnings.
How does M1 Finance make money if it’s free?
M1 Finance generates revenue through multiple streams beyond the platform fee. The company earns interest on uninvested cash balances (paying you 3.35% while earning more from partner banks), collects margin interest from borrowers using the Borrow feature, receives payment for order flow on trades, and charges fees for specific services like account transfers ($100) and mutual fund trades ($20). M1 also offers optional premium features. This business model allows M1 to offer commission-free trading and waive the platform fee for accounts with $10,000 or more.