M1 Finance vs Robinhood

Two of the best free investing apps are M1 Finance and Robinhood. While both let you trade most U.S.-listed stocks for free, there are a few key differences. Whether you’re a new investor or an experienced investor who wants to avoid those $4.95 trade fees, either of these platforms can help you be a successful investor.

This M1 Finance vs. Robinhood comparison will help you pick the platform for how you buy stocks and ETFs without paying trade fees. Depending on how much time you want to spend researching, you can look at the brief comparison or keep scrolling for an in-depth look at each platform.

Disclaimer: As a quick aside, I may get a small commission from either M1 Finance or Robinhood if you join either program through the links on this page. If so, thank you and happy investing.

The Brief Summary: M1 Finance vs Robinhood

First impressions can make a world of difference. If you want a brief comparison, I’ve listed two options below that summarizes each brokerage. The more appealing option might be the better platform for you.

Platform A

Here are a few characteristics of Platform A:

  • Only one daily trading window
    • You must submit your buy and sell orders before 10 am Eastern for the trade to execute the same day.
  • You can buy partial shares of stocks and ETFs
    • Example: If a stock costs $100 but you can only invest $50, you can buy 0.5 shares
  • Assign each stock in your portfolio a percentage-based allocation (like a 401k or Betterment account)
    • Example: If you own 10 stocks you can assign each stock to have a 10% target allocation
      • With a 10% target allocation per stock, each stock gets $10 for every $100 you invest

Platform B

These are two characteristics of Platform B:

  • Can buy or sell shares at any time during normal market hours
  • Can only buy full shares of stocks and ETFs
    • If a single share costs $100, you must have at least $100 or your order doesn’t execute
  • Your portfolio allocation is dollar-based instead of percentage-based
    • Maintaining or rebalancing your portfolio can be more time-consuming

What Platform is Which?

Can you guess the platforms?

If not, here are the answers:

  • Platform A: M1 Finance  <—Use this link to get a $10 cash bonus when you join
  • Platform B: Robinhood   <—-Use this link to get a free share of stock when you join (worth up to $200)

M1 Finance (Platform A) is going to be more like your 401k account, investing in mutual funds, or using Betterment (without the advisory fee mind you) because your money can buy partial shares and M1 will automatically rebalance your portfolio. They are rolling out a premium option which now offers an afternoon trading window too.

Robinhood is more like a traditional online broker like Fidelity or Vanguard. Although Robinhood doesn’t have as many investment options like individual bonds you don’t pay trade fees. And they also give you the ability to trade options (if that’s your thing).

An In-Depth M1 Finance vs Robinhood Comparison

If you’re still reading this, that means you like details. Or you do at least when it comes to investing.

We’ll cover each platform individually. Both platforms are extremely popular for their own reasons, so they are both worth a look to make sure you pick the best one.

M1 Finance

M1 Finance

Because it comes first in alphabetical order, let’s first review M1 Finance.

Here are the highlights again from our brief overview of M1 Finance:

  • Only one daily trading window
    • You must submit your buy and sell orders before 10 am Eastern for the trade to execute the same day.
  • You can buy partial shares of stocks and ETFs
    • Example: If a stock costs $100 but you can only invest $50, you can buy 0.5 shares
  • Assign each stock in your portfolio a percentage-based allocation (like a 401k or Betterment account)
    • Example: If you own 10 stocks you can assign each stock to have a 10% target allocation
      • With a 10% target allocation per stock, each stock gets $10 for every $100 you invest

To become a “one stop financial shop,” M1 is also offering a borrowing option similar to a 401k loan and an FDIC-insured checking account you can use for ATM withdrawals and online bill pay. At its core, M1 is an investing platform so we’re going to focus on that aspect in this comparison.

M1 Finance Fees

It’s 100% free to invest with M1. But there’s also a premium feature called M1 Plus that costs $50 the first year (then $125 each subsequent year) that offers more investing and banking features. We’ll cover M1 Plus a little later on.

With the free “M1 Basic” platform, you can do the following for free:

  • Trade stocks and ETFs during the daily trading window that opens at 10 am Eastern Standard Time
  • Access to 6,000+ stocks and ETFs or 100+ expert portfolios
  • Schedule daily, weekly, or monthly trades
  • Automatic portfolio rebalancing
  • Ability to create individual, joint, IRA, or trust account

You can also borrow up to 35% of your investment account balance, but you will pay monthly interest on your outstanding balance. The interest rate resets monthly, but as of February 2019, that interest rate is 4.25%.

The upcoming M1 Spend feature lets you open an FDIC-insured checking account. Your deposits don’t earn interest and you don’t get cash rewards on debit card purchases. Personally, I recommend a Capital One 360 checking account if you want free ATM access and an interest-bearing checking account.

M1 Plus Fees

Upgrading to M1 Plus costs $50 for the first year. After that, you pay $125 each year. Since you probably want to trade stocks for free, the extra perks might not be worth the fee. Here’s what you get as an M1 Plus member:

  • A second trading window (M1 doesn’t specify the time on their website)
  • 0.25% discount on M1 Borrow cash loans
  • 1% cash back on debit card purchases
  • 1.5% APY interest on M1 Spend checking account deposits

While I have an account with M1, I’m not in a hurry to upgrade to M1 Plus anytime soon. For me, the most appealing perk is the second trading window. But, I would need to make at least 25 trades in the second window (assuming you pay $4.95 to make these same trades at your regular broker) to “break even.” I’m not a frequent trader so the math doesn’t add up for me.

Account Options

  • Individual Taxable
  • Joint Taxable
  • Retirement (Roth, Traditional, SEP)
  • Trust

Individual and joint taxable accounts need an opening minimum of $100 to make your first trades.

IRAs need a $500 starting balance to begin trading.

For future trades, M1 requires you to have at least $10 of new money to execute trades.

Investing Experience

Investing with M1 is like a balancing act. If you manage your own 401k plan, you will be familiar with how you decide how much to invest in each mutual fund. With M Finance, you create an investment pie which is a basket of individual stocks, ETFs, and premade pies.

Once you decide what you want to invest in, you assign a target allocation percentage to each asset. So if you make a pie with 100 different stocks and ETFs, you can only invest 1% into each asset.

You can buy or sell positions as you please, but remember these two rules:

  • Your pie allocation must always equal 100% to save any changes to your pie
  • Must submit your trade request before the window opens at 10 am Eastern
M1 Finance vs Robinhood

An example of what an M1 portfolio looks like. You assign each investment slice a target allocation. You can also see if the actual allocation is under, above, or on par with the target percentage.

Investment Options

  • Individual Stocks
  • ETFs (includes leveraged and inverse ETFs)
  • Expert Premade Pies

Your investment options are basically any individual stock and ETF that trades on the New York Stock Exchange and the Nasdaq.

You won’t be able to buy OTC or ADR stocks of foreign companies that trade on American exchanges. Two notable examples include Naspers (NPSNY) and Omron (OMRNY) that you can’t trade on M1 but can trade on Robinhood.

If you’re an aggressive investor, you can also trade leveraged and inverse ETFs that multiply your potential income (or losses) 2x or 3x when a particular index advances or declines.

M1 Expert Pies

Finally, you might appreciate the 80 M1 expert pies. These pies are similar to what you might find with Betterment’s risk tolerance portfolios that hold different stock and bond ETF percentages to have investment strategies that go between Ultra-Aggressive to Ultra-Conservative.

Other pies try to mimic target date retirement funds, hedge funds, fixed income, and socially responsible investing.

Portfolio Rebalancing

Because M1 makes you assign each holding a target percentage, you can enjoy their free automatic rebalancing option. When you invest new money, M1 automatically invests your cash into the holdings that are underallocated.

For instance, let’s say you have Nike in your portfolio with a 10% target allocation. But if its actual allocation is 9%, M1 will invest your first dollars to bring the balance back to its target rate.

On the flipside, if an asset is overallocated (i.e. 11% actual allocation but has a 10% target allocation, M1 won’t invest any new money into that asset).

You can also perform manual rebalancing by clicking the “rebalance” button. This resets your pie to the target allocations at the next trading window by selling your winners and using the proceeds to buy shares of the underperforming stocks. Remember the winning portions you sell are taxable.

Reinvesting Dividends

When your different holdings pay dividend income, M1 doesn’t reinvest them to buy more shares of the same stock. If you want to reinvest the shares in the same stock, go with Robinhood or another traditional stock brokerage.

Instead, M1 puts the dividend income into your cash account. The next time that balance reaches at $10, M1 invests the cash to rebalance your portfolio.


  • Can trade fractional shares of stocks and ETFs
  • Automatic portfolio rebalancing
  • Taxable and IRA accounts are available
  • Expert pies make investing easy for “hands-off investors”
  • M1 Plus offers a second daily trading window


  • Only one daily trading window–must place orders before 10am EST for same-day execution
  • Must meet account minimums to begin trading
    • Taxable accounts: $100
    • Retirement accounts: $500
  • After your initial trade, your cash balance must be at least $10 to buy new shares
  • M1 doesn’t reinvest dividends into the same stock, they go into your cash balance instead



Robinhood is probably the best-known free investing app. This is partially because of their aggressive advertising on social media and other news programs. Plus, in a world where most online brokers charge between $4.95 and $7.95 per trade, the prospect of $0 stock trades opens eyes.

It’s possible to trade the following for free on Robinhood:

  • Stocks
  • ETFs
  • Options
  • Select cryptocurrencies

Robinhood vs M1 Finance

Before we go in-depth on Robinhood, here’s a quick summary of the differences between both platforms.

Robinhood can be a better option than M1 Finance for these reasons:

  • Want to make trades in real-time—not one daily trading window
  • Trade options
  • Want access to more OTC stocks (though you still can’t trade every stock)
  • Want to trade shares based on the share price, not a percentage
    • Robinhood doesn’t let you buy or sell partial shares
  • Get one free stock share when you join Robinhood

M1 Finance is better than Robinhood when:

  • Want to trade partial shares instead of full shares
  • Like assigning a target allocation to each holding
  • Want an IRA investment account
    • Robinhood only offers taxable accounts

Robinhood Investment Fees

Robinhood doesn’t charge commissions to buy or sell stock or ETF shares. You also won’t pay the additional fee to trade options. But (and M1 has similar complaints), you might not get the best buy or sell price compared to using a traditional broker like Fidelity or Schwab.

While you don’t pay a flat trade fee, the Robinhood market price might be more expensive than other brokers because Robinhood receives trade rebates from the market makers.

If you have a Robinhood Gold margin account, you will pay a monthly interest fee. To maintain a margin account, you must keep a $2,000 balance which means you pay $6 in interest each month.

Robinhood Account Types

At this time, Robinhood only supports taxable accounts. IRA accounts aren’t an option at this time.

If you only want to trade stocks and ETFs, Robinhood doesn’t have an account minimum. You only need enough cash to buy a single share of stock.

If it’s a stock like Chesapeake Energy (CHK), that’s about $3 per share. But you will need to pony up $1600 per share for Amazon (AMZN).

Robinhood desktop platform

A glimpse at the Robinhood desktop platform

Investing Experience

I have a little bit of money at Robinhood. What I like is that the experience is similar to investing with a standard brokerage like Fidelity or Schwab. For instance, you can even place limit orders if you don’t want to rely on the market price. The one obvious difference is that you can trade the stocks for free.

What is different is that you won’t have all the research and charting options that other brokers have. If you do your research elsewhere, you don’t need these extra tools. And, you don’t have to live customer service and some of the other additional investment options like bonds and mutual funds either.

If you’re a beginner investor, these extra tools and options aren’t a dealbreaker. Especially if you’re investing small amounts of money each month as those $4.95 trade fees add up quickly. But once you get a sizable portfolio or a large enough income where the trade fees don’t pinch your wallet as much as before, transferring to a standard brokerage can be in your best interest.

Another reason why you might prefer Robinhood to M1 is that you don’t have to assign a percentage target allocation to each stock. The target allocations “force” you to maintain a diversified portfolio. But if you only want to use a free investing app to trade stocks but you keep your index funds and commission-free ETFs at another brokerage, buying a certain amount of shares can be less hassle than distributing your money to the underallocated shares first. Maybe those underallocated shares are stocks you currently want to “hold” and not buy more of right now.

Investment Options

You can buy or sell stocks, ETFs, and most OTC stocks in real-time. It’s also possible to trade stocks but you can’t short stocks.

Regarding OTC stocks, you can Robinhood offers Naspers (NSPNY) and Omron (OMRNY) that M1 Finance doesn’t offer. But, you still can’t trade penny stocks and more volatile OTC stocks like Sprott (SPOXF) and junior minor Midas (MDRPF).

Reinvesting Dividends

Robinhood can also reinvest your dividends directly into the stock instead of putting the balance into your general cash account. The direct dividend reinvesting (DRIP) is one frustration among M1 Finance dividend investors.

Portfolio Rebalancing

One downside of not assigning a target allocation is that Robinhood doesn’t offer portfolio rebalancing. You will have to sell your winners or buy more of your losers to rebalance your portfolio. Exactly like when you’re a DIY investor with Fidelity, Schwab, Vanguard, or E*TRADE.

Research Tools

I personally wouldn’t rely exclusively on the M1 Finance or Robinhood research tools before making a trade. Robinhood has slightly more research available than M1 Finance including:

  • Recent stock news (M1 has this)
  • Basic historical performance chart (M1 has this)
  • Basic analyst ratings
  • People are also buying…

To read detailed analyst reports, I recommend opening an account at a traditional broker like Fidelity or TD Ameritrade that don’t have an opening account balance requirement. Or, you can invest in index mutual funds or their commission-free ETFs.

This way, you can use Robinhood to buy stocks, even though you do your research elsewhere.

Tip: Get two monthly stock suggestions from Motley Fool Stock Advisor.


  • Can make real-time market order and limit order stock and ETF trades
  • Can trade options
  • Don’t have to assign a target allocation to each holding
  • Dividends reinvest in the same stock or ETF
  • Available for mobile devices and desktop computers

Investors wanting real-time trades should choose Robinhood over M1.


  • Can’t trade partial shares
  • No IRA account option
  • No automatic rebalancing

If you’re investing small amounts of cash, being able to buy partial shares helps ensure you keep a diversified portfolio. It also means you can buy partial shares of expensive stocks like Amazon that you can only get exposure to through ETFs unless you can invest large sums of money.

When to Choose M1 Finance

M1 Finance and Robinhood are both legit free investing apps. But they cater to different types of investors.

Use M1 Finance if you prefer these advantages more:

  • Want to buy partial shares
  • Are “ok” with a single daily trading window
  • Won’t be trading options
  • Want an IRA account (Robinhood only offers taxable accounts)

Join with this special link to get a $10 bonus when you join M1 Finance.

When to Choose Robinhood

Robinhood is better when:

  • Want real-time trades
  • Can buy full shares of stocks and ETFs
  • Plan on trading options

Robinhood can be a better option for price-sensitive investors who rely on real-time trades. It’s also the better option if you don’t like the target allocation investing model that M1 requires.


Which of these investing apps do you plan on using? Why do you think M1 Finance is better? Why do you think Robinhood is better? Please leave a comment and let us know!



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