M1 Finance vs. Robinhood [2024]: Who They’re Best for

M1 Finance vs. Robinhood: Overview

M1 Finance⁴ and Robinhood aren’t really designed with the same type of investor in mind.

	M1	Robinhood
Best for...	Passive investors and those seeking account variety	Active investors and those seeking fractional investing
Minimum investment	$100 for taxable accounts; $500 for retirement accounts	None, except for margin accounts, which require a $2,000 minimum
	Read full review | Visit M1 Finance Paid Non-Client Promotion FinanceBuzz doesn’t invest its money with this provider, but they are our referral partner. We get paid by them only if you click to them from our website and take a qualifying action (for example, opening an account.)	Read full review | Visit Robinhood

Who is M1 Finance best for?

M1 Finance (often called M1) is an automated investment platform that combines some features of typical online brokerages with some features of the best robo-advisors. It requires a $100 account minimum to open an individual taxable account and $500 to open a retirement account.

If you fit into any of the following categories, you should probably choose M1 over Robinhood.

Passive (hands-off) investors

If checking on your investments and scheming your next trade doesn’t come naturally, I recommend M1 Finance. The platform uses automated mini-portfolios called “Pies,” which are unique in that they offer a more visual representation of how your investments are balanced and a more intuitive way to adjust them than I’ve seen.

Your portfolio is basically your M1 brokerage account. It’s made up of pies, which are divided into slices (smaller investments or even pies). For example, I have two pies in my portfolio: one invested in moderately aggressive assets and one in aggressive assets.

Here’s an example of a pie so you can see how it looks:

If it sounds confusing, it isn’t. It just takes a little getting used to and a few minutes upfront to decide how you want to slice it up. M1 Finance makes it easy to start and set up a long-term investing strategy. Plus, you can just pick an expert-built portfolio if building one from scratch is too much. There are a whopping 60 portfolios to choose from.

Robinhood allows you to buy investments but doesn’t manage them on your behalf. If you’re interested in automated portfolio management, M1 Finance outshines Robinhood.

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Robinhood Benefits

• Trade crypto 24/7, commission-free
• Your coins and personal information are protected
• $0 minimum account deposit
• Real-time market data

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Investors who want investment account variety

If you want to invest using something other than a brokerage account or IRA, M1 Finance is the better choice. Robinhood offers taxable brokerage accounts and traditional and Roth IRAs. Although these options could be sufficient for you, M1 Finance may appeal to a wider range of investors.

Here are the accounts M1 offers that Robinhood does not:

• SEP IRAs
• Trust accounts

Investors who want a credit card

Speaking of account variety, investors who want a credit card from the same place they invest may want to go with M1. Although I’ll admit, this one is really close, and it definitely depends on where you spend. Both platforms have credit cards, but M1’s ekes out the win in my eyes because it offers a higher rewards rate and doesn’t require a paid brokerage account.

The M1 Owner’s Rewards Card earns up to 10% cash back on select categories, plus 5% back on brands like Chewy and Starbucks and 2.5% back on gas stations and Target. Yes, Target — the big box store everybody loves that bafflingly doesn’t count toward superstore and grocery spending rewards with pretty much every other credit card. Plus, it earns 1.5% on everything else. I would genuinely consider applying for this one.⁵

Investors who want a cash management account (CMA)

Cash management accounts are sort of like high-yield savings accounts you open with brokerages. The benefit of doing this is that you can conveniently move funds from spending money to investments and vice versa, and your uninvested cash earns interest.

M1 High-Yield Cash Account earns up to 4.25% (as of 11/01/24), and the Robinhood Gold account also earns up to 4.25% (as of 11/15/24) APY, but I prefer M1’s because it’s available as either an individual or joint account and doesn’t come with a $5 monthly fee (Robinhood’s requires a Robinhood Gold plan).

Who is Robinhood best for?

When it launched in 2013, Robinhood was a pioneer in commission-free stock trading, and it remains a force in real-time trading. If any of these descriptions ring true for you, I’d recommend Robinhood.

Active (hands-on) investors

The option to trade in real-time with Robinhood likely makes it the better choice for more hands-on investors and day traders. M1 Finance offers just two trading windows daily — one in the morning and one in the afternoon. M1 also isn’t set up for monitoring stock activity like Robinhood is.

Investors who want asset variety (+ crypto)

Robinhood and M1 Finance let you invest in stocks, ETFs, and cryptocurrency, but only Robinhood provides options, futures, and American Depositary Receipts (ADR) investment choices. If you understand how to buy cryptocurrency and are interested in doing so, you have fewer options with M1 Finance.

For slightly more experienced investors who want to dabble in advanced trading, Robinhood comes out on top. Neither platform offers mutual fund investment.

Fractional-share investing

Robinhood is great for self-directed, fractional-share investing. With fractional shares, you can buy into a variety of assets with smaller amounts of money. For example, you could get 1/10th of a $200-share stock for $20 rather than saving $200 for a full share. Although M1 lets you buy fractional shares of stocks and ETFs, Robinhood offers more options and doesn’t have an account minimum (better if you have less cash to work with).

Investors who want a debit card

If you specifically want a debit card, you’d have to choose Robinhood. The Robinhood Cash Card offers cash back rewards, plus the ability to get your paycheck up to two days early with direct deposit. Unlike many debit cards, it doesn’t come with overdraft fees or balance minimums. You can also round up your transactions and have the extra sent to your investment account.

However, it’s important to note that this is technically a prepaid debit card. Rather than pulling funds directly from a checking account, you have to fund the card from a linked bank account.

Good to know: While M1 used to have a debit card, it’s discontinued that product with no plans announced to bring it back or roll out a new one.

Fees and plans

M1 Finance and Robinhood don’t charge commissions to make trades, but that doesn’t mean there are no fees.

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Robinhood Benefits

• Buy and sell stocks 24 hours a day, 5 days a week with Robinhood's "24 Hour Market"
• Commission-free trading (other fees may apply)
• No account minimum
• Trade stocks, options, ETFs, and more
• Earn 4.25% (as of 11/15/24) APY⁶ on your uninvested cash with Robinhood Gold, subscription fee applies

4.2

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

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FAQs

Bottom line

Between Robinhood and M1 Finance, you’re going to get a great investment app. But each one is best for different things.

Robinhood could be the better choice for hands-on investors who prefer to manage their investments themselves with real-time and advanced trades, plus a wider variety of assets. M1 Finance is best for hands-off but customizable portfolio management, with a focus on long-term strategies and more types of investment accounts.

All-In-One Investing App That Truly Does It All

4.2

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Robinhood Benefits

• Buy and sell stocks 24 hours a day, 5 days a week with Robinhood's "24 Hour Market"
• Commission-free trading (other fees may apply)
• No account minimum
• Trade stocks, options, ETFs, and more
• Earn 4.25% (as of 11/15/24) APY⁶ on your uninvested cash with Robinhood Gold, subscription fee applies

4.2

FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.

Join Robinhood here