Is M1 Finance a Scam?
M1 Finance is a financial services company that offers a one-stop-shop approach to banking and investing. The firm’s list of brokerage accounts, bank accounts, and lines of credit can be used one by one or as a comprehensive financial management system.
Thanks to its long list of services and impressive interest rates, M1 has become quite popular, but is it safe?
Let’s find out.
Is M1 Finance Safe?
The short answer to whether M1 Finance is safe is yes, and many aspects of the firm’s business
confirm that.
As a member of FINRA and SEC, M1 Finance is obligated to protect its customers in every way it can. As a result, M1 uses an industry-leading clearing firm and provides insurance on all its accounts.
Is M1 Finance Legitimate?
Apex Clearing is one of the most popular clearing firms in the retail trading industry. It powers
some of the industry’s best-known brokers, and it provides a high level of security and reliability
for M1 Finance users. M1 Finance makes good use of Apex’s infrastructure to provide a safe and reliable trading platform for its users.
Some of the safety and stability features of Apex Clearing include efficient trade execution,
trade clearing, backend record-keeping, and settlement services. Additionally, Apex requires its broker-dealers (M1 included) to maintain good business practices.
Insurance
All U.S.-based brokers must have safety nets in place to protect customer accounts. Some of the
accounts and services offered by M1 Finance are protected by FDIC, and others are protected by SIPC. Both forms of insurance are in place to protect investors in the unlikely event that M1 goes out of business.
FDIC
FDIC protects M1 Save and M1 Spend accounts.
Deposits have protection of up to $250,000 per account type. Since coverage is based on each account, it is possible to insure up to $500,000 if you have an M1 Save and an M1 Spend account.
SIPC
SIPC covers most other products at M1 Finance, except for direct cryptocurrency investing. Whether you have an individual, joint, custodial, trust, or retirement account with M1, securities and cash are protected up to $250,000.
M1 Finance Awards
In addition to using one of the industry’s top clearing firms and adhering to the various regulations
of SEC and FINRA, M1 Finance awards and reviews also provide evidence of the firm’s trustworthiness.
With recognition for its sophistication, auto-investing offering, cash management services, and
investment platform coming from names like Money, Yahoo!, the ascent, and Investopedia, M1 has
clearly struck a chord with industry leaders.
M1 Finance Reviews
Awards are excellent indicators of quality and innovation, but customer reviews can be even more telling. As advertised on its website, M1 Finance enjoys very positive user reviews.
Apple’s App Store shows a rating of 4.7/5 out of nearly 53,000 opinions. Google Play offers a
similar story, with over half a million downloads and an average rating of 4.5/5 stars.
M1 Finance Review
It is now evident that M1 is dependable and can be relied on. Of course, a broker has more qualities than just reliability. Are M1 Finance’s brokerage and cash management services right for you?
Let’s explore the features and benefits that M1 offers.
M1 Finance Bonus Offer
To begin with, it’s worth noting that funding a new account at M1 Finance comes with a generous bonus incentive.
This deposit reward ranges from $75 up to $500 when you add new funds to a new M1 Finance brokerage
account. The bonus is arranged in tiers, each level requiring a particular deposit amount.
Approved deposits start at $10,000 and go up to $100,000.
Fees and Commissions
M1 Finance has reasonably low costs, though it is not entirely free. Whether you find M1’s offerings worthwhile depends on several factors.
M1 Finance does not charge any trading commissions,
but investors will still face exchange and clearing charges. These are quite small and are
standard across brokers.
M1 Finance does apply a $3 monthly fee for accounts with balances under $10,000.
Interests Rates
Interest rates for M1’s banking products (M1 Save and M1 Spend) are much higher than what you typically find at regular banks. M1 members can earn 2.55% APY
on the funds in the M1 Spend account and up to 4% APY in the newer M1 Save account.
M1 also charges interest for margin loans at a rate of
6.25%.
Investment Approach
When it comes to investment options at M1 Finance, there are many appealing choices for traders.
One distinctive feature of M1 Finance is its investment pies. These are portfolios made up of stocks and ETFs that users can build and adjust to suit their preferences. Pies can be as basic or intricate as you want, and rebalancing them is straightforward.
Investors may create their own portfolios using cryptocurrencies, stocks, and ETFs, or pick from ready-made options assembled by M1’s financial experts.
The platform also provides tools like auto-rebalancing and fractional share trading, helping users diversify their holdings with ease.
Investment Windows
Another special feature of M1 Finance is its trade window system. Rather than letting each trader buy or sell at any time, M1 groups all orders and processes them during specific windows.
M1 has two trading windows: one in the morning and another in the afternoon.
In general, M1’s trade windows suit most investors, but those who need frequent real-time transactions may prefer a different service.
Account Types & Cash Management
Another major selling point of M1 Finance, aside from its distinctive investment style, is its all-in-one approach to investments and cash management.
With multiple account types, various investing methods, dedicated banking services, a credit card, and personal loans, M1 users can manage a significant portion of their finances through one platform.
Below is an overview of M1’s different offerings.
M1 Save
M1 Save is M1 Finance’s high-interest savings account. It provides up to 4% APY on savings, is FDIC-insured, and has no minimum balance or monthly charges. Users can quickly transfer money between M1 Invest and M1 Save, making it simple to handle cash and investments together.
M1 Spend
M1 Spend is M1 Finance’s checking account. It offers up to 2.55% APY on the account balance. M1 users can also get up to 1% cash back on certain debit card purchases. The account has no monthly fees, no minimum balance, and is FDIC-insured. M1 Spend is a great option if you want a free checking account with attractive benefits.
M1 Borrow
M1 provides two types of loans, each with its own terms. There are personal loans and margin loans.
M1 Personal Loans function as credit lines from M1 Finance. Amounts run from $2,500 to $50,000, with rates from 7.49% up to 21.75%. There are no extra fees, which can be appealing for budget-conscious borrowers.
M1 Margin Loans use your M1 Invest account as collateral. You can borrow
up to 40% of your portfolio’s value at a low rate (6.25%). This may be helpful for users who need short-term funds.
M1 Owner’s Rewards Credit Card
The M1 Owner’s Rewards Credit Card is provided by M1 Finance. It offers 2.5% cash back on every purchase and up to 10% cash back with M1’s partner brands. You can use the cash back to fund your M1 account or pay down the card balance.
The card also has no annual or foreign transaction fees, which is great for users who travel often or shop internationally.
M1 Finance Review Recommendation
M1 Finance works well for investors who want a simple, flexible investing service with minimal costs. It also suits those seeking a checking or high-interest savings account with competitive rates and no fees. For a credit card that offers cash-back rewards with no annual or foreign fees, M1 is also a solid choice.
M1 Finance may not be ideal for investors who trade often or need advanced research features. Also, customers who prefer a standard banking setup with physical branches might not find M1 Finance to fit their preferences.
Updated on 2/23/2025.
I work in investment analytics and have been investing in the market since I was in high school. I enjoy anything that involves lots of strategy (i.e. a good game of chess), which is why I was naturally drawn to investing and researching companies. Outside of investing, I’m a big fan of the outdoors. In summer, you’re most likely to find me kayaking, camping, and hiking in the mountains.
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