As an investor seeking a new online stock broker, you might find yourself considering M1 Finance vs. Robinhood. Both of these brokers offer a suite of services beyond buying and selling stocks, so it can be hard to choose the best option for you. Read on to find out how M1 Finance and Robinhood stack up.
M1 Finance vs. Robinhood: At a glance
Offer | M1 Finance | Robinhood |
---|---|---|
Rating | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. |
Commissions | $0 commissions and no management fee. M1 Plus membership costs $3 per month. | $0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold |
Account Minimum | $100 | $0 |
Next Steps | Open Account for M1 Finance Read Full Review | Open Account for Robinhood Read Full Review |
M1 Finance vs. Robinhood: Commissions & fees
Robinhood pioneered zero-commission trading and has stuck to that model ever since. Robinhood has $0 commissions on all trades of stocks, cryptocurrencies, and ETFs. For that reason, Robinhood is consistently ranked as one of the best ETF brokers. Robinhood continues to push the envelope with $0 commissions on cryptocurrency and options trades. Combine that with no account maintenance fee, and you've got a very low-cost broker. For a $5 monthly fee, users can upgrade to Robinhood Gold, which gets you lower margin rates, higher APYs on uninvested cash, and access to professional research from Morningstar.
M1 Finance offers $0 commissions on stock and ETF trades. Similarly to Robinhood, M1 Finance does not charge an account maintenance fee (though it does charge a fee for low balances with 90 days of account inactivity). M1 Finance doesn't charge a monthly fee, but it offers M1 Plus membership for $3 per month. M1 Plus members get features like discounted margin rates, multiple trading windows, and access to custodial accounts.
Investors on either platform will enjoy low transaction and maintenance fees, at least until they transfer their accounts elsewhere. For outgoing account transfers, M1 Finance charges $100, and Robinhood charges a $100 fee.
M1 Finance | Robinhood | |
---|---|---|
Stock & ETF commissions | $0 | $0 |
Options commissions | N/A | $0 |
Crypto commissions | 1% | $0 |
Mutual fund commissions | N/A | N/A |
Account transfer fee | $100 | $100 |
Account maintenance fee | $0; $3 per month for M1 Plus | $0; $5 per month for Robinhood Gold |
Data sources: M1 Finance and Robinhood.
M1 Finance vs. Robinhood: Investments available
Like most brokers, M1 Finance offers stocks and ETFs. By allowing users to trade fractional shares, M1 Finance makes it possible for smaller investors to purchase big names, like Amazon and Google. However, M1 Finance only lets investors trade individual stocks, ETFs, and a few cryptos, which is hardly groundbreaking among brokers.
Robinhood allows customers to buy stocks and ETFs, and it supports fractional trading. However, Robinhood also allows investors to trade options and cryptocurrencies without charging a commission. That means customers can trade a wider range of investment options, without getting hit with transaction fees.
It is important to note that neither M1 Finance nor Robinhood support other investment options. Investors can't trade mutual funds, CDs, bonds, futures, or currencies on either platform.
LEARN MORE: Best Options Trading Platforms
M1 Finance | Robinhood | |
---|---|---|
Stocks and ETFs | Yes | Yes |
Fractional shares | Yes | Yes |
Options | No | Yes |
Mutual funds | No | No |
CDs | No | No |
Bonds | No | No |
Futures | No | No |
Crypto | Yes | Yes |
Currencies | No | No |
Data sources: M1 Finance and Robinhood.
Alternatives to Consider
We recommend comparing brokerage options to ensure the account you're selecting is the best fit for you. To make your search easier, here's a short list of our best trading platforms of 2024.
Account | Fees | Account Minimum | |
---|---|---|---|
Featured Offer Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold | $0 | Open Account for Robinhood |
Rating image, 4.5 out of 5 stars. 4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 for stocks, $0 for options contracts | $0 | Open Account for SoFi Active Investing |
Rating image, 5.0 out of 5 stars. 5.0/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. | $0 commission for online U.S. stock and ETF trades. No fees to buy fractional shares. | $0, ($1 minimum per fractional share transaction) | Read Review |
M1 Finance vs. Robinhood: Account types available
M1 Finance offers individual retirement accounts including:
- Traditional IRAs
- Roth IRAs
- SEP IRAs
Joint and custodial accounts are helpful for transfer of ownership between M1 Finance customers. M1 Finance also offers margin, credit card, and checking accounts, which integrates investing, borrowing, and banking under one roof.
Robinhood investors have access to a taxable brokerage account for trading and a margin account for borrowing. But recently, Robinhood expanded its offerings. It now offers Roth IRAs and traditional IRAs (with a 1% match, or 3% match for Gold members), along with a spending account. There's also the Robinhood Gold Card, a credit card exclusively for Gold members.
Unlike M1 Finance, Robinhood doesn't offer joint or custodial accounts. For that reason, M1 Finance might be a better fit for investors with complex tax or ownership situations.
LEARN MORE: Best IRA Accounts
M1 Finance | Robinhood | |
---|---|---|
Taxable brokerage | Yes | Yes |
Joint tenant | Yes | No |
Margin | Yes | Yes |
Robo-advisor | Yes | No |
Traditional IRA | Yes | Yes |
Roth IRA | Yes | Yes |
SEP IRA | Yes | No |
Custodial | Yes | No |
Checking | No | Yes (spending account) |
Savings | Yes | No |
Credit card | Yes | Yes |
Data sources: M1 Finance and Robinhood
READ MORE: Best Robo-Advisors
M1 Finance vs. Robinhood: Mobile app and trading platforms
M1 Finance offers a user-friendly platform to both desktop and mobile customers. It offers the typical portfolio holdings, trading activity, and transaction buttons. Plus, M1 Finance's platform stands out with a few features:
- Investors can rebalance their portfolio with the click of a button.
- Users can answer questions about financial goals to make more informed investment decisions.
- You can view an individual stock's weight and performance with an interactive, intuitive chart called "The Pie."
As one of the original investing apps, Robinhood led the pack for streamlined simplicity. Robinhood's platform is so intuitive that some argue that it makes risky trading strategies too accessible. Beyond the traditional trading app trimmings, Robinhood provides its users with a newsfeed for a customizable list of stocks. Especially unique are the text-message-like announcements of IPOs, Robinhood updates, and transaction reports.
Both brokers offer a trading platform that is easy to use and visually stunning. And both platforms offer features you would expect including performance metrics, transaction history, and the ability to buy and sell assets. However, each offers a unique spin on the traditional broker's platform.
Final take
For M1 Finance vs. Robinhood, each boasts strengths and weaknesses. Finding the best online stock broker for you largely depends on what you value as an investor:
- Robinhood is a strong contender for an active investor who wants to trade options or cryptocurrencies.
- M1 Finance stands out for a passive investor who seeks to invest, borrow, and bank all under one roof.
If you are an investor seeking a slick platform for trading stocks and ETFs without paying high fees, either of these brokers may be a good choice, depending on your investing needs.
Open Account for M1 Finance
OnM1 Finance'sSecure Website.
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- M1 Finance
- Robinhood
Ratings Methodology
Featured Offer
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Read Full Review
Fees:
$0 for stocks, ETFs, and options; $5 monthly for Robinhood Gold
Account Minimum:
$0
Special OfferEarn a 1% bonus with no cap when you transfer your brokerage account to Robinhood, now through June 28, 2024. Terms apply.
Earn an uncapped bonus
Open Account for Robinhood
OnRobinhood'sSecure Website.
Our Rating:
Rating image, 4.5 out of 5 stars.
4.5/5Our ratings are based on a 5 star scale.5 stars equals Best.4 stars equals Excellent.3 stars equals Good.2 stars equals Fair.1 star equals Poor.We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Bottom Line
Read Full Review
Fees:
$0 commissions and no management fee. M1 Plus membership costs $3 per month.
Account Minimum:
$100
Open Account for M1 Finance
OnM1 Finance'sSecure Website.
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By:Charlie Pastor, CFP®
Certified Financial Planner®, Founder of Damn Good Planning
Charlie Pastor, CFP® is a full-time financial planner dedicated to overserving the underserved. He has a degree in Finance, Accounting, and Personal Financial Planning from the University of Colorado Boulder. His professional experience includes founding a Registered Investment Advisor firm dedicated to serving young professionals. Outside of writing for The Ascent, Charlie enjoys serving as political advocacy chair for the Financial Planning Association of Colorado.
By:Robin Hartill, CFP
Writer
Robin Hartill, CFP®, is The Ascent’s Head of Product Ratings and has worked for The Motley Fool since 2020. Her work has appeared in various national publications, including Yahoo! Finance, NerdWallet, Investopedia, CNN Underscored, MSNBC, USA Today, and CNET Money. She previously wrote The Penny Hoarder’s syndicated “Dear Penny” personal finance advice column. She is based in St. Petersburg, Florida.
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