M1 Margin Interest Rates

M1 Margin Rates (2024)

Current M1 Finance margin rates: interest charged on margin loan. M1 Finance margin account requirements and lending cost.

M1 Finance Margin Rates

Debit Balance M1 Finance Margin Rates
$0,01 - $24,999 8.75%
$25,000 - $49,999 8.75%
$50,000 - $99,999 8.75%
$100,000 - $249,999 8.75%
$250,000 - $499,999 8.75%
$500,000 - $999,999 8.75%
$1,000,000 + 8.75%

M1 Finance Plus Margin Rates

Debit Balance M1 Finance Margin Rates
$0,01 - $24,999 7.25%
$25,000 - $49,999 7.25%
$50,000 - $99,999 7.25%
$100,000 - $249,999 7.25%
$250,000 - $499,999 7.25%
$500,000 - $999,999 7.25%
$1,000,000 + 7.25%

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Margin Accounts and Rates at M1 Finance

M1 Finance offers more than just investing. The brokerage firm has many useful financial services, one of which is margin. Let’s check it out.

M1 Finance’s Version of Margin

Margin works a little differently at M1 Finance, just as pretty much everything else works differently. Instead of a traditional margin service with a tiered pricing schedule, the brokerage firm has something called M1 Borrow. The service charges a flat fee on borrowed funds. Plus members get a discount, but in either case, the fee is always very low by industry standards. A Plus membership does cost $3 per month.

One of the biggest differences between M1 Borrow and a traditional margin service is that M1 adds margin power automatically to every account. There’s no need to apply for margin capability. Once an account reaches at least $2,000 in equity, it can start using borrowed funds. Previously, the minimum level was $5,000, but M1 has lowered it.

M1 Margin Account

Interest on borrowings is charged at the end of the month. The fee is deducted from the available cash balance. If there is no available cash, it is added to the amount borrowed, but there’s a limit to this.

An M1 Finance brokerage account can borrow up to 40% of account equity. This is a slightly lower number than other firms have (usually, it’s 50%). If an account holds certain securities like very volatile stocks or leveraged ETFs, the 40% figure will drop a little.

Open M1 Finance Account

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Plus Membership

On top of a lower margin interest rate, Plus accounts get a host of other features at no additional cost (beyond the $3 per month). These include:

- Ability to open custodial accounts
- Smart transfers
- Two trading windows per day (instead of one)
- A checking account with 3.3% APY
- No forex fees with the M1 debit card

M1 Finance's $0 Commission

Major thing that sets M1 Finance apart from other firms and makes it the best broker for investing in fractional shares, is that there are no commissions to pay for investing. That's right - you pay $0 commission at M1 Finance. The broker makes money on optional services, such as lending funds and credit cards.

How M1 Finance Handles Dividends

M1 Finance doesn’t offer a traditional Dividend Reinvestment Plan. Instead, it takes dividends from all securities that pay them and deposits the cash in a separate position. Once this position reaches $10, the broker invests the cash into the Pie, using preset target percentages. Thus, fractional shares will be purchased each time the cash position reaches $10. That’s the default setup anyway.

An alternative you can choose is auto reinvest when the cash position breaches a certain level. For instance, you could set $800 as the trigger. If you deposit $900, exactly $100 will be invested in the Pie. Or you can just turn off this feature and make additional purchases whenever you’re ready. There is a $10 minimum on the M1 platform.

m1 margin rates


If for any reason you decide that M1’s Pie method of investing isn’t for you, there are alternatives out there. However, as we already mentioned, there aren’t many brokerage houses that permit the purchase of fractional shares of stocks, closed-end funds, or ETF’s. Stash Invest is one exception, but it only offers a small selection of stocks and ETF’s for fractional investing. At M1 Finance, all stocks and ETF’s that trade on major exchanges are eligible. Stash Invest also charges a monthly fee, while M1 is completely free.

A second alternative would be to open an account with a broker that has a traditional DRIP service (such as Charles Schwab), and add fractional shares whenever a dividend is paid. Adopting this approach, however, means you will have to buy at least 1 share upfront; and as we pointed out this can be quite expensive with some stocks. Plus, you will not be able to make additional purchases besides the dividends. At M1, this is possible.


M1 Spend does not come with checks. By contrast, Charles Schwab and Merrill Edge offer checks and debit cards (free of charge). Furthermore, the limited number of ATM fee rebates puts M1 Finance at a disadvantage when compared to many of its rivals. For example, Schwab offers an unlimited number. And Schwab’s checking account doesn’t charge an annual fee.

Speaking of an annual fee, M1's $3 per month price tag (for accounts under $10K) seems rather excessive to us; although the cash back program and interest rate can help to offset it.

Ally Invest is one of the few low-cost brokers left today that still imposes an annual fee for checks ($20) and another for its debit card ($35). The brokerage firm offers no ATM fee rebates. But an Ally Bank account, which has better policies, can be linked to an Ally Invest account.

M1 Finance Margin Rates Judgment

M1 Finance has attractive margin rates and some decent cash management tools; but better options can be found at rival firms.

Updated on 4/20/2024.

About the Author
Chad Morris is a financial writer with more than 20 years experience as both an English teacher and an avid trader. When he isn’t writing expert content for Brokerage-Review.com, Chad can usually be found managing his portfolio or building a new home computer.