M1 Finance vs Robinhood: Fees, Features, and Investment Options Compared

M1 Finance and Robinhood are two popular investment platforms that offer unique features and benefits. M1 Finance has no management fees, allowing investors to keep more of their earnings.

Robinhood, on the other hand, charges a $5 monthly fee for accounts with less than $2,000, but no management fees for accounts with more than $2,000. This can add up quickly.

Investors can also use M1 Finance to create a custom portfolio with a mix of stocks, bonds, and ETFs, while Robinhood offers a more straightforward trading experience with a focus on individual stocks and ETFs.

M1 Finance offers a wider range of investment options, including 1,200 ETFs and 1,000 stocks, whereas Robinhood offers 7,000 stocks and ETFs. This can be a deciding factor for investors looking for more flexibility.

Fees and Commissions are a crucial aspect to consider when choosing between M1 Finance and Robinhood. Robinhood kicked off the commission-free trading craze with $0 fees for stocks, ETFs, and options.

Both Robinhood and M1 Finance charge $0 commissions and trade fees, making them solid choices for budget-friendly online brokerages. However, they start to differentiate themselves when it comes to their subscription-based services and margin fees.

To trade on margin with M1, you have to sign up for their M1 Borrow program, which offers a 6.75% APR fee. This is significantly higher than Robinhood's margin rate of 2.5% interest rate for amounts above $1,000.

M1 Finance charges a $20 inactivity fee on accounts with up to $20 and no activity for 90+ days, whereas Robinhood has no inactivity fee. However, Robinhood Gold, their add-on service, comes with a $5 per month fee.

Here's a comparison of the fees associated with M1 Finance and Robinhood:

Overall, both M1 Finance and Robinhood offer competitive fees, but it's essential to consider your specific needs and trading habits before making a decision.

Robinhood offers a cash management account with a variable 0.30% APY and no fees for ATM withdrawals, overdrafts, transfers, or foreign transactions. This account also comes with a debit card and is FDIC-insured.

Opening a Robinhood cash management account is free, and you can do so with as little as $0. On the other hand, M1 requires a minimum deposit of $100 to open a regular account, and $500 for retirement accounts.

M1's higher entry level can be beneficial for those who are serious about long-term financial success, as it encourages an early commitment to saving and investing.

Robinhood offers two main account types: the basic account and Robinhood Gold.

The basic account type has no fees and no entry price, making it a great option for those just starting out.

To use margin accounts, you'll need to upgrade to Robinhood Gold, which costs $5 a month.

With Robinhood Gold, you can make larger deposits instantly, which can be a big help for those who need to invest a lot of money at once.

One of the biggest benefits of Robinhood Gold is access to professional research reports from Morningstar.

Here are some of the key features of Robinhood Gold:

You can learn more about trading options on Robinhood by visiting their website.

Robinhood offers a range of additional features that can help you take your trading to the next level.

You can learn more about these features at How to Trade Options on Robinhood.

M1 Finance offers a range of customized investment portfolios to suit different needs and goals.

You can build your own portfolio from scratch, or choose from over 80 pre-made Expert Pies, each aligned with a specific investment strategy.

Expert Pies are professionally curated portfolios made up of ETFs and stocks, giving you a solid foundation for your investments.

Community Pies are another option, with portfolios that align with socially responsible goals or values, such as supporting Black-led businesses or companies run by LGBTQ+ executives.

These portfolios are designed to help you make a positive impact with your investments.

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Having a solid cash management account can make a big difference in your financial life. Opening a cash management account with Robinhood is free and comes with a debit card.

With Robinhood's cash account, you can earn 0.30% APY, although this rate is variable and can change at any time. There are no ATM fees from over 75,000 ATMs nationwide.

You'll also appreciate the lack of overdraft fees, transfer fees, or foreign transaction fees on this account. This can save you a significant amount of money in the long run.

M1 Finance's Spend account is another option, offering a $0 account minimum and reimbursement for one ATM fee per month.

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M1 Finance is designed to excel in specific areas, but it's not perfect and has some limitations.

You can't trade options on M1 Finance, which is understandable since it's meant for stocks and ETFs.

The platform only offers liquid stocks and ETFs, which is still a vast selection with thousands of options. However, if you're looking for more niche ETFs or OTC stocks, you'll need to use another brokerage.

M1 Finance has a unique trading schedule with only one or two trading windows per day. This means you can't trade frequently like you can with most other brokerages.

M1 Finance doesn't provide premium research like some full-service brokerages do. For example, Charles Schwab offers premium Morningstar analysis that's behind a paywall.

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Robinhood offers research, analysis, and stock screener tools, but they're not as competitive as other brokerages. You can set up candlestick charts and watchlists within the app.

Investors can also look at "People Also Bought" to get more ideas for stocks. Savvy investors will probably do their research outside of Robinhood and just use the app for commission-free trades.

M1 Finance is a self-directed investment platform that allows automatic investment in stocks and ETFs. It offers hundreds of financial education articles, blogs, and videos for new investors.

With M1 Finance, you can set up an expert pie in minutes by selecting your retirement date and portfolio type. This platform automatically rebalances your portfolio and ensures it stays aligned with your selected asset allocation.

However, M1 Finance lacks screener tools, charts, and analysis software due to its passive investment approach. There are more research tools and watchlists available with Robinhood.

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To open an account with M1, you'll need to deposit at least $100, which is a higher entry level than Robinhood's $0 minimum.

M1's higher account minimum can be beneficial for those who are committed to long-term financial success, as it encourages an early investment.

The account minimum for retirement accounts with M1 is $500, which is significantly higher than the standard account minimum.

This higher minimum can actually be a good thing, as it promotes a more substantial investment in one's future.

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Both Robinhood and M1 Finance are registered with the Securities and Exchange Commission (SEC) and members of Financial Industry Regulatory Authority (FINRA). This ensures that they operate under strict regulations and guidelines.

Customer funds are protected by the U.S. investor protection scheme, called SIPC, which covers your money in the event that the broker goes bankrupt or becomes insolvent. The limit of SIPC protection is $500,000, including a $250,000 limit for cash.

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Robinhood offers basic security features, including Face ID and simple verification. You may also encounter a security challenge if you log in from a different device.

M1 Finance, on the other hand, offers more advanced security features, including 4096-bit encryption for all data transfers. This is a significant upgrade from Robinhood's basic security measures.

You can also set up two-factor authentication through your phone with M1 Finance, providing an extra layer of protection for your account.

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Robinhood's app is designed for mobile trading, allowing you to access your accounts, monitor performance, and set up watchlists. You can also review candlestick charts and trade with multiple order types.

M1 Finance's app, on the other hand, is geared towards DIY investors who want automated investment tools. You can open an account and set up your investments, including pies, all within the app.

Robinhood's app is simple and fast, taking you step-by-step through available stocks and ETFs. M1 Finance's app also takes a streamlined approach, guiding you through the process of selecting investments.

With M1 Finance, you can select specific ETFs for your retirement savings based on a target date. While Robinhood's app doesn't have research tools, it does allow you to set up four-leg option spreads.

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M1 Finance takes a hybrid approach to investing, offering a mix of robo-advisor and hands-on brokerage features. This means you have control over your portfolio, but also get automated features like rebalancing and access to 80 expert-built portfolios.

You can choose from about 6,000 stocks and ETFs to include in your portfolio, which is called a "pie." Your assets in your pie are called "slices." M1 Finance offers various account types, including individual taxable accounts, joint accounts, IRAs, and trusts.

M1 Finance does not offer bonds, mutual funds, cryptocurrency, or options trading. You can't do day trading on M1's platform, and you're limited to one trading window unless you upgrade to M1 Plus.

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M1 Finance and Robinhood both offer options trading, but with some differences. Robinhood investors can trade options, while M1 Finance does not.

Robinhood also allows you to trade cryptocurrency, which is not an option on M1 Finance. If you're looking for a platform to trade options and cryptocurrency, Robinhood might be the better choice.

However, M1 Finance offers a more hands-off approach with automated features like rebalancing, which can be a big plus for investors who want to minimize their effort.

If you're interested in cryptocurrency, you're in luck because Robinhood offers commission-free trades for a range of popular coins.

One of the most well-known cryptocurrencies is Bitcoin (BTC), which is supported by Robinhood, along with its variants Bitcoin Cash (BCH) and Bitcoin SV (BSV).

Dogecoin (DOGE) is another cryptocurrency you can trade on Robinhood's platform, known for its community-driven approach.

Ethereum (ETH) and Ethereum Classic (ETC) are also supported, with Ethereum being one of the most widely used platforms for building decentralized applications.

Litecoin (LTC) rounds out the list of available cryptocurrencies on Robinhood, offering fast and secure transactions.

Robinhood is releasing cryptocurrencies to customers on a state-by-state basis, so availability may vary depending on where you live.

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M1 Finance is a great option for passive investors who want automated diversification and can combine tax-advantaged accounts with low-risk portfolio investing.

If you're more hands-off and want the ability to invest for retirement, then M1 Finance is the clear winner here. But if you're fired up about learning how to invest in stocks, options, and crypto, or want to be hands-on with your trading, then Robinhood may be for you.

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M1 Finance is nearly perfect as an investment platform for long-term investors, with a unique and powerful software platform that can weight your securities in fixed percentages.

For smaller accounts, M1 Finance is great even if it's your only investment platform. For someone looking to get started with investing, I would direct them to M1 Finance.

Robinhood's mobile app is extremely easy to use, and this is where they differ from competitors because the mobile phone savvy investor is their target.

Robinhood kicked off the commission-free trading craze with $0 fees for stocks, ETFs, and options. Even option contracts can be traded for $0.

There are no minimum account balances with Robinhood, and you never have to pay an inactivity fee. However, this changes if you upgrade to Robinhood Gold, which is for margin traders.

You can trade for free on M1 Finance, but a minimum balance of $100 is necessary to keep in your taxable account. This amount goes up to $500 if you have an IRA account.

M1 Finance recently introduced a $3 monthly platform fee, which is waived for clients maintaining at least $10,000 in assets on the platform for one day during the billing cycle or holding an active Personal Loan.

Here's a quick comparison of the fees and benefits of Robinhood and M1 Finance:

Borrowing from your investment portfolio can be a convenient way to access cash when you need it, but it's essential to understand the risks involved.

M1 Finance's margin loan feature, called M1 Borrow, allows you to borrow up to 35% of your portfolio balance, but you'll need a portfolio value of at least $10,000 to access it.

You're charged monthly interest on the borrowed amount, but you're free to make payments on your own terms, without a set repayment schedule.

However, if the value of your portfolio declines too much, M1 Finance may force a call for repayment, which can be a stressful experience.

This is why it's crucial to understand the risks of margin lending before using it, as it can magnify any losses you experience in the market.

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If you're looking for a $0 fee app, you've got two great options: Robinhood and M1 Finance. Robinhood is known for its commission-free trading, and it's one of the reasons why crypto-asset investors love the app.

Both Robinhood and M1 Finance offer free trades, but there are some differences in their fees and features. For example, Robinhood doesn't charge any inactivity fees, but M1 Finance charges $20 for accounts with up to $20 and no activity for 90+ days.

One thing to note is that Robinhood Gold, an add-on service, charges $5 per month, while M1 Finance's premium service, M1 Plus, costs $125 annually. However, M1 Plus lowers your margin interest rate from 3.5% to 2%.

If you're looking for a budget-friendly online brokerage, both Robinhood and M1 Finance are solid choices. Here's a quick comparison of their fees:

M1 Finance is also a great option for retirement investors, as they offer Roth, Traditional, and SEP IRAs, and you can even roll over an existing 401(k) into an IRA with M1 Finance.

Ultimately, the best $0 fee app for you will depend on your individual needs and preferences. But with Robinhood and M1 Finance, you can't go wrong!