M1 Finance Review: Start Investing for Free

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Investing in the stock market overwhelms many, but it doesn’t have to. Our M1 Finance review shows how to invest in stocks for free and grow your wealth.

Many people earn passive income by investing in the stock market. You might think stock investing requires a ton of cash, but I’ve got good news for you. The rise of investing apps like M1 Finance make it easy to invest with little money.

I use the platform to buy fractional shares of stocks and ETFs with small monthly investments.

New and experienced investors may appreciate the unique M1 Finance app features. This M1 Finance review covers the different investing tools that can help you invest during a recession and the eventual bull market.

What is M1 Finance?


M1 Finance launched in 2015. They became a free investing app in December 2017, while most brokers charged at least $4.95 to trade stocks and ETFs.

You can buy fractional shares of most stocks, ETFs, and premade “expert pies.” Once again, many brokers require you to buy whole shares of these assets.

If you can’t afford an entire share, your cash sits on the sidelines and miss potential investment gains.

When I joined M1 in 2018, my brokerage was charging $7 per trade. This broker now offers free trades but still doesn’t offer fractional investing.

M1 Finance currently manages over $1 billion in assets with over 150,000 members. You can open taxable and retirement accounts for free.

The platform can be an excellent option to invest in stocks and index funds in the same account with $0 trade fees. A fee-free online bank account is also available to all members.

You should consider the M1 Finance app if you’re comfortable managing your own portfolio and not trying to day trade.

A robo-advisor like Betterment can be a better fit if you prefer fully-automated investing platforms that recommend what to invest in.

For instance, you don’t have the time or desire to manage your portfolio. However, you will pay a 0.25 percent annual account fee for the convenience.

How to Start Investing on the Platform


Joining M1 Finance is free, and you can open taxable and retirement accounts in minutes.

An optional M1 Plus membership costs $125 per year. Premium benefits include an afternoon investment trading window and banking rewards.

You can upgrade later as a basic membership gives you access to all M1 Finance investment options.

You must be at least 18 years old and a legal US resident to join. Linking a checking account when joining lets you fund your M1 Invest account(s) sooner.

After verifying two small deposits, you can schedule fund transfers.

Unlike most robo-advisors, M1 doesn’t ask investment questions about your risk tolerance to recommend a model portfolio. The lack of recommendations may deter some investors.

The premade M1 Finance expert pies can make it easy to invest in popular strategies. You can add new stock and ETF positions as your investing skills increase.

Taxable accounts have an initial minimum deposit of $100 to start investing. Traditional and Roth IRAs require a $500 starter investment.

But you can open an account for free to explore your investment options.

Subsequent investments for all taxable and retirement accounts is only $25. M1 lets you schedule recurring transfers, so you never forget to invest new cash.

Your next step after joining is building a fully customizable investment pie while waiting for your funds to arrive. It can take several minutes to find the various assets you want to invest in.

After deciding what to invest in, you assign a target allocation to each “slice.” The minimum target allocation per slice is one percent.

M1 Finance uses dynamic rebalancing to maintain your target asset allocation. New cash, dividend income, and selling slices buy shares of assets beneath their target allocation.

Unlike robo-advisors, M1 Finance doesn’t sell assets without your permission.

The free M1 Finance platform has a single daily trading window. You must place your buy and sell orders before 9:30 a.m. Eastern for M1 to fill your order on the same day.

M1 Plus members have access to a 3 p.m. Eastern trade window too.

If basic members place an order at noon, you must wait until the next morning trading window to fill your order.

Short-term traders should consider Robinhood to have more flexibility when timing the market.

Investment Options


It’s possible to invest in most assets that trade on the Nasdaq and New York Stock Exchange:

  • Individual stocks: Over 3,800 stocks that trade on the US stock exchanges
  • ETFs: Over 1,900 exchange-traded funds, including index, sector, and REITs.
  • Expert pies: Most premade pies only invest in ETFs to pursue different investment strategies. Some mimic robo-advisors with the Modern Portfolio Theory principles. Other strategies include target retirement dates and socially responsible investing.

You cannot short stocks, trade options, or invest in mutual funds with M1 Finance.

One downside of M1 Finance is the lack of in-depth research and educational tools. Using these free investing tools and reading investing books can help you make informed decisions.

Every investment option is available for these M1 Invest account types:

  • Individual taxable
  • Joint taxable
  • Traditional IRA
  • Roth IRA
  • Trust

Custodian accounts are not available to help your children invest. You might consider Stash Invest to open custodial accounts.

Fractional Investing

One reason why the M1 Finance app is so popular with new and experienced investors is its fractional investing benefit.

Most online brokers also offer free trades for stocks and ETFs yet require you to buy full shares.

After the initial minimum account deposit, your subsequent deposits must only be $25. It’s hard to invest small amounts of money and diversify, as most stock and ETF shares cost at least $25 each.

For instance, a single share of an S&P 500 index fund ETF may cost $250. Most brokers require you to have the full $250 to invest.

But M1 Finance lets you buy as little as $1 of the same fund at the next trading window.

M1 Finance buys additional shares of a slice when it’s at least $1 below the target allocation.

M1 Borrow


Like a 401(k) loan, M1 Borrow lets you make a low-interest loan from your taxable investment accounts. Retirement accounts do not qualify for M1 Borrow.

You can borrow up to 35 percent of your portfolio value with a minimum $10,000 account balance. The current interest rate is 3.50 percent for basic M1 members and 2.00 percent for M1 Plus members.

You might consider this portfolio line of credit if you can’t pay the bills this month but don’t want to sell stocks.

However, the money you borrow can miss any market gains until you repay your balance. Your real interest rate can be much higher if you miss these gains.

The average annual return for the S&P 500 is seven percent, for instance.

Applying for a personal loan as you can continue investing in the stock market.

M1 Spend


Many robo-advisors offer online cash management accounts. M1 Spend is a free online banking account for basic and M1 Plus members.

All M1 Finance members can use their Spend account for direct deposit and debit card purchases. There isn’t a minimum account balance or account fees.

You have up to $250,000 in FDIC insurance. Basic members get one free ATM fee reimbursement each month.

M1 Plus members enjoy these exclusive M1 Spend benefits:

  • Earn one percent APY on your entire account balance
  • Get one percent cash back on debit card purchases
  • Up to fee ATM fee reimbursements each month

Basic M1 Finance members do not earn debit card rewards or bank interest but still avoid common bank fees.

Enrolling in direct deposit lets you quickly transfer money to your investment accounts instead of waiting up to three business days.

M1 Plus


The premium M1 Plus membership program costs $125 per year. You receive several benefits by paying this membership cost.

Here is a quick summary of why you might upgrade:

  • Afternoon daily trading window
  • Earn one percent on M1 Spend deposits and debit purchases
  • Reduced M1 Borrow interest rate

Basic members get access to all of the investment options and fractional investing.

Pros and Cons



Fractional investing. You can buy fractional shares of stocks, ETFs, and premade expert pies. This makes it easy to diversify while investing small amounts of cash at once.

Many investment options. Few investing apps offer as many stocks and ETFs as M1 Finance. The expert pies make it easy to invest while self-managing your portfolio.

Dynamic rebalancing. You build your investment pie and schedule recurring deposits. M1 Finance automatically rebalances your portfolio with each investment.

No fees. The M1 Invest taxable and retirement accounts are free.

Low investment minimums. Initial minimum deposits are $100 for taxable accounts and $500 for retirement accounts. Subsequent transfers must only be $25, and you can buy fractional shares in multiple portfolio slices.


No fully automated option. Several expert pies copy the investment methods of robo-advisors and avoid the account fees. M1 Finance requires self-management, similar to investing with Vanguard or Fidelity. New investors and busy professionals may prefer paying a robo-advisor to manage their investments.

Limited research tools. M1 Finance offers few tools for research and charting. You will need to research potential stocks and ETFs elsewhere. The lack of in-depth tools and charting may not affect you if you plan on investing in index ETFs or expert pies.

Narrow trading windows. Basic M1 Finance members must submit their buy and sell orders before the morning trading window opens. Wait until the next market day can be frustrating when other free investing apps offer real-time order execution.

Other Robo-Advisor Platforms


Different investing platforms also offer fractional investing. These apps might be a better fit for your investing needs.


Acorns invests in a basket of stock and bond index ETFs but not stocks. Each portfolio has different risk tolerance levels, from conservative to aggressive.

You can start investing with as little as $5 in a taxable account, but you pay a $1 monthly fee.

For $3 per month, you can open retirement accounts and a rewards checking account similar to M1 Spend. Acorns also lets you round up your purchases to invest your spare change.


Betterment is one of the most popular robo-advisors. It’s a good option if you don’t want to self-manage your portfolio.

This investing platform recommends a stock and bond index fund portfolio that they automatically rebalance. M1 Finance “General Investing” expert pies use the same investment strategy.

It’s free to join, and you can start investing in taxable and retirement accounts with $10. The annual account fee is 0.25 percent of your account balance.

High-interest cash management accounts and rewards checking accounts are available to all members.

Learn more by reading our Betterment review.


Robinhood is the free investing app that’s most similar to online brokers like Ally Invest. You can trade stock, ETFs, and options when the market is open.

Advanced investors may appreciate the ability to place limit and stop orders to secure a specific share price.

Fractional investing is available, but Robinhood won’t rebalance your portfolio.

Stash Invest

Stash Invest might be a better option for new investors as there are more educational resources. You also only need $5 to start investing versus $100 with M1 Finance.

You can open an online bank account with Stash Invest. Fee-sensitive investors may prefer M1 Finance as Stash Invest costs $1, $3, or $9 per month.

Learn more by reading our Stash Invest review.

Bottom Line


Investing in stocks with little money isn’t expensive with M1 Finance. Fractional investing makes it easy to invest in index ETFs.

As your portfolio grows, you can add high-quality stocks and ETFs to help diversify your asset allocation.

Open an M1 Finance account today for free and start investing with as little as $100.


Do you earn passive income with other brokerage accounts? What M1 Finance features do you like most? Which investment options are the cornerstone of your investment pie?


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Josh uses his personal experience to write about saving money and getting out of debt. After getting out of debt, Josh switched careers in 2015 and took a 60% salary cut. He enjoys spending his free time with his wife and three young children or reading books. You can catch more of Josh's story at his blog,

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