M1 Finance is one of the most popular online financial institutions due to its personalized investment platform. The platform has grown in popularity due to its flexibility, transparency, and affordability. It allows investors to put together a portfolio that aligns with their investment goals, and the process is relatively straightforward. M1 Finance provides different types of account and investment options to ensure maximum flexibility for investors of different levels and risk tolerances. Here is a comprehensive overview of M1 Finance’s account options:
Individual Brokerage Account
An individual brokerage account is an investment account for one person, allowing them to buy and sell different types of securities such as stocks, ETFs, and bonds. An individual brokerage account at M1 Finance has a minimum deposit requirement of just $100, making it the ideal starting point for beginner investors.
Joint Brokerage Account
A joint brokerage account is an account that two or more people can open together. It is an excellent option for married couples who would like to save and invest together. M1 Finance offers joint brokerage accounts with no minimum deposit requirement.
Traditional IRA
A Traditional IRA is a tax-advantaged retirement savings account that allows individuals to make tax-deductible contributions to their account. These contributions are not taxed until they are withdrawn in retirement. M1 Finance’s Traditional IRA does not have a fee, and the minimum investment amount is $500.
Roth IRA
A Roth IRA is a tax-advantaged individual retirement account that allows individuals to make contributions with after-tax dollars and then withdraw the money tax-free in retirement. M1 Finance’s Roth IRA has no fee, and the minimum investment amount is $500.
SEP IRA
A SEP IRA is a tax-advantaged retirement account that allows business owners to contribute up to 25 percent of their income, or up to $58,000 in 2021. Employers can also make contributions on behalf of their employees. M1 Finance’s SEP IRA does not have a fee, and the minimum investment amount is $500.
Trust Account
A trust account is a legal entity that holds assets for the benefit of another person. M1 Finance offers investment accounts for trusts to help protect and grow those assets. Trust accounts do not have a fee at M1 Finance, and the minimum investment amount is $500.
Custodial 529 Account
A custodial 529 account allows parents or grandparents to save for their child or grandchild’s college education. The account is held in the child’s name, and the parent or grandparent serves as the custodian. M1 Finance does not charge a fee for custodial 529 accounts, and the minimum investment amount is $25.
Taxable Brokerage Account
A taxable brokerage account is an investment account that allows individuals to buy and sell securities, and the gains or losses are taxed in the year they occur. M1 Finance’s taxable brokerage account does not have a fee, and the minimum investment amount is $100.
Portfolio Line of Credit
Portfolio Line of Credit is a flexible and low-interest line of credit that is secured by your investment portfolio at M1 Finance. It allows you to access cash for any financial needs, from paying for college tuition, unexpected emergencies, to buying a new home. The minimum amount for a Portfolio Line of Credit is $10,000.
Income Portfolio
The Income Portfolio is a pre-built portfolio option that is dialed towards providing income to investors. The portfolio is composed of a mix of ETFs and stocks that focus on dividend-paying companies, bonds, and other income-generating securities.
Growth Portfolio
The Growth Portfolio is a pre-built portfolio option that is dialed towards providing long-term growth to investors. It is composed of a mix of ETFs and stocks that focus on growth companies and sectors.
Borrow Portfolio
Borrow Portfolio is a pre-built portfolio option that is the perfect balance between low interest rates and long-term gains. The portfolio is composed of a mix of ETFs and stocks that provide excellent growth potential while keeping borrowing costs relatively low.
Smart Transfers
This feature is designed to automate the process of investing at M1 Finance. Smart Transfer allows you to set up regular automated investments for your accounts, portfolio selection or cash balance based upon your choice. This pre-built feature can help boost your investment strategy.
Expert Pies
Expert Pies is a pre-built investment portfolio designed by M1 Finance’s experts to achieve various investment goals. Depending on your financial plans, these pies combine different investment strategies and diversify them, thus providing an all-in-one investment solution for various investors.
M1 Spend
M1 Spend is a checking account and high yield savings account, providing you with a simple way to budget and manage your finances. With M1 spend, you’ll be able to invest and borrow at the lowest possible cost, unlike traditional banks.
M1 Borrow
M1 Borrow is a low-interest rate line of credit that allows you to access cash against the value of the investment account. M1 Borrow’s rates start at just 2%, making it an attractive alternative to traditional lenders, who have considerably higher rates.
M1 Plus
M1 Plus is an upgraded account option providing access to premium features, higher interest rates, cash back on debit card purchases, and various free promotions. The monthly fee for M1 Plus is $125.
M1 Finance App
M1 Finance has advanced into mobile banking with their mobile app. With M1’s App, you can access your portfolio, account decisions, trade securities and budget both within your portfolio and outside it – all from the palm of your hand.
M1 Referral Bonus Program
M1 Finance has an attractive referral bonus program, which rewards both the referrer and the referred friend. M1 will give you $30 when you refer friends or family to open an account.
1. Does M1 Finance have a minimum investment requirement?
Yes, there are minimum investment requirements for some account options. The cheapest minimum deposit is $25, required for Custodial 529 accounts.
2. Does M1 Finance offer tax-advantaged accounts?
Yes, M1 Finance offers several types of tax-advantaged accounts, including Traditional IRA, Roth IRA, and SEP IRA.
3. Can I open a joint brokerage account?
Yes, M1 Finance offers joint brokerage accounts that allow two or more people to invest together.
4. Does M1 Finance offer pre-built investment portfolios?
Yes, M1 Finance offers pre-built investment portfolios known as Expert Pies.
5. Is M1 Finance a member of SIPC?
Yes, M1 Finance is a member of the Securities Investor Protection Corporation, which ensures that the funds and securities of customers are protected up to $500,000.
6. Is M1 Plus worth the monthly fee?
The benefits of M1 Plus depend on your financial needs and preferences. It offers premium features like high-interest rates and cashback; users need to decide whether it is worth the monthly fee of $125.
7. Can I access my M1 Finance account from my mobile device?
Yes, M1 Finance has its mobile app, which allows investors to access and manage their accounts from their mobile devices.
8. What is Smart Transfer?
Smart Transfer is an automated feature designed to help investors set up pre-authorized transfers to their M1 Finance account.
9. Does M1 Finance charge any fees for withdrawals?
M1 Finance does not charge any fees for withdrawals for most investment accounts. However, non-retirement accounts may be subject to tax implications and penalties.
10. Can I use M1 Borrow to buy other securities?
M1 Borrow is designed to allow investors to take out low-cost loans against the value of their investment portfolio at M1 Finance. You can use this money to cover various expenses such as purchasing other securities, but it is subject to applicable terms and conditions.
M1 Finance offers numerous account options, making it an excellent choice for investors of all levels and risk tolerances. The platform’s flexibility, transparency, and affordability make it a popular choice among online investors. The pre-built investment portfolios, automation features, and low borrowing interest rates provided by M1 Finance are attractive to investors, which highlights the platform’s innovation and appeal.
