Should I use M1 Finance or Robinhood?
M1 offers automated investing, borrowing, a credit card, banking, and retirement investment accounts all in one platform. Robinhood has an easy-to-use platform, making it ideal for beginner investors who want to learn how to buy and sell individual stocks, options, ETFs, or cryptocurrency.
Tradable securities: 1.5 out of 5 stars
Investors on the M1 platform have access to over 6,000 securities, some of which start at $1. However, M1 notably does not offer mutual funds, which limits the diversification investors can have in their portfolio.
Is M1 Finance investing good for beginners? Yes. No funds are required to open an account, and you can begin investing with as little as $100. They provide complete investment management, including periodic rebalancing, with no advisory fee and no fees for adding stocks or ETFs to your portfolios.
Robinhood is a pioneer in the no-commission brokerage model. It remains a solid choice for beginners, as they can invest in stocks, ETFs, options, and cryptocurrencies with zero commissions.
Robinhood is considered safe for investors. It's a member for the Securities Investor Protection Corp. (SIPC), is regulated by the SEC, and has additional financial protection per customer up to certain amounts for cash and securities.
M1 is a legitimate company that is safe to use. They are a registered broker/dealer with FINRA and a member of the SIPC. The company is also transparent about how it generates revenue and provides customers with protection like FDIC-insurance on cash balances. Overall, M1 a safe and legitimate way to invest.
Is M1 Finance better than Robinhood? M1 Finance is geared toward long-term investors, since it doesn't allow for multiple trades. Unlike Robinhood, it doesn't offer options trading. Active traders will probably prefer Robinhood's platform, which makes trading easy for beginners.
Robinhood is considered one of the largest and legitimate fintech platforms, with funds protected up to $500,000 for securities and $250,000 for cash claims, thanks to membership in the Securities Investor Protection Corporation (SIPC).
Withdrawals, transfers, and funding your account are easy on M1. Our platform takes the stress out of investing so you can focus on building wealth. Learn more about the difference between traditional IRAs and Roth IRAs. Each IRA has different rules that make up the account.
M1 is a commission-free platform. Beginning May 15, 2024, clients without an active M1 Personal Loan or clients with M1 assets that do not reach a minimum value of $10,000 at least one day during each billing cycle will incur a monthly $3 platform fee.
How much does it cost to transfer out of M1 Finance?
There is a $100 outgoing ACAT fee for all account types and an additional $100 closing fee for retirement accounts. For example: Transferring out your Individual Brokerage Account would incur a fee of $100.
Robinhood's range of offerings is extremely limited in that it only offers stocks, ETFs, options, and cryptocurrency trading. Robinhood doesn't support mutual funds or fixed-income products, and you can't trade commodities, forex, or futures.
Robinhood
Robinhood is a solid option for beginners wishing to trade stocks and ETFs, and new users can get their first stock free.
In 2024, Robinhood was also named our top pick for online brokerages in our annual reader survey, specifically because of their app and commission-free trading. See our full list of the best stock brokers here. They were also named a Top investing App.
The platform has over $6 billion in assets under management. M1's headquarters is located in Chicago, Illinois. As of November 2021, the company had over 500,000 members.
You can take an M1 Margin Loan of up to 50% of your portfolio value at 8.75% interest rate, or 7.25% if you are an M1 Plus member*. The M1 Margin Loan rate is based on short-term interest rates and is subject to change if and when the Federal Reserve changes its target for the federal funds rate.
Initial deposit minimums
M1 Traditional IRA, Roth IRA, SEP IRA: Minimum of $500. After your initial deposit any amount greater than $10 can be deposited.
What are the disadvantages of using Robinhood? The main downside of Robinhood is that the investment selection is limited for hands-off, passive investors: The broker offers no mutual funds or index funds, which financial advisors typically suggest using as the basis of a diversified portfolio.
- Best for Global Traders: Interactive Brokers.
- Best for Intermediate Traders: Webull.
- Best for Futures Trading: TradeStation.
- Best for Traders of All Levels: Moomoo.
- Best for Trade Ideas: Public.com.
Robinhood is quite well-regarded by users of the app. It has a rating of 4.2 out of five stars among 4.2 million iOS users on The App Store, and 4.1 out of five stars among 481,000 Android users on Google Play.
Is M1 Finance financially stable?
Yes! M1 Finance is insured by the Securities Investor Protection Corporation, or SIPC. The SIPC insures the securities that you hold in your portfolio, as well as the cash sitting in your investment account.
Your personal information is encrypted in transit (between your computer and M1) and at rest (on the servers at M1). Your personal information has restricted access and is only used for the purpose of protecting your account and verifying your account information.
| Other | |
|---|---|
| Mutual Fund Sales | $20 |
| Liquidating securities traded on foreign exchanges | $50 |
| Rights Exercise Fee | $50 |
| Charitable donation of stock (per security) | $25 |
- High-yield savings accounts.
- Money market funds.
- Short-term certificates of deposit.
- Series I savings bonds.
- Treasury bills, notes, bonds and TIPS.
- Corporate bonds.
- Dividend-paying stocks.
- Preferred stocks.
Which investment gives high return? Investments in equity or equity-oriented instruments, such as stocks and equity mutual funds, typically offer high returns. However, they come with higher risk compared to fixed-income investments. Real estate and certain types of ULIPs can also offer high returns.
