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

Choosing an investing app can feel overwhelming because there are lots of options out there and you want to make sure you make the best choice for your money. M1 Finance¹ and Robinhood are two popular investing platforms that are worth considering if you want to start investing.

Both of these apps offer unique features that will appeal to certain types of investors. Comparing these characteristics to your investment goals could help you find the best option for you and your personal finances.

If you’re thinking about investing with M1 Finance² or Robinhood, the following information can help you decide which company better suits your needs.

M1 Finance vs. Robinhood

M1 Finance³ and Robinhood each have different benefits and drawbacks when you compare them to each other. Here’s a quick summary of the basics of each option.

Minimum investment	$100 for taxable accounts; $500 for retirement accounts	None, except for margin accounts, which require a $2,000 minimum
Account fees	$3/month (waived if you have a balance of $10,000 or more at least during your billing cycle or if you have a personal loan with M1)	None for a basic account $5/month for Robinhood Gold
Asset classes	Stocks Exchange-traded funds Cryptocurrency4	Stocks Exchange-traded funds Options Cryptocurrency American Depositary Receipts (ADRs)
Account types available	Individual taxable Joint taxable Traditional IRA Roth IRA SEP IRA Trusts	Individual taxable FDIC-insured spending account Traditional IRA Roth IRA
Features	Fractional shares5 Customizable portfolios (pies)6 Recurring investments Dividend reinvestment Commission-free trades7 Margin trading8	Fractional shares Recurring investments Dividend reinvestment Real-time trading Commission-free trades Margin trading with Robinhood Gold Robinhood Cash Card
Distributions	Withdraw money to your bank account, required minimum distributions apply to IRAs	Withdraw money to your bank account
Taxes	No tax-loss harvesting, but offers a tax minimization feature9	No tax-loss harvesting
Best for...	Investors looking for the convenience of pre-built portfolios and automatic rebalancing.10	Investors who want to pick individual investments and trade in real time.
	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.)	Visit Robinhood

How does M1 Finance work?

M1 Finance is a money management tool that offers an investing component with two account tiers. With its free version, you can invest in stocks and ETFs with virtually any amount, thanks to fractional-share investing. The option to invest in fractional shares can make investing more accessible because buying a portion of a share of stock can be much less expensive than buying a whole share.

In addition to making investing more accessible, M1 Finance also focuses on making investing easy for beginners with pre-built portfolios and automatic rebalancing. When you sign up for an account, M1 offers the option to pick an expertly built portfolio, referred to as an expert pie, or you can choose to build your own. The platform also offers educational materials to help you learn about investing.

M1 Finance offers two trading windows each day — one in the morning and one in the afternoon. Its cost is modest at $3 per month, and that can be waived if you have a personal loan with M1 or if you have a balance of $10,000 or more at least once during a billing cycle. 

Read our M1 Finance review.

How does Robinhood work?

Robinhood was a pioneer in the world of commission-free stock trading when it launched in 2013, and since then, many companies have chosen to follow Robinhood’s example.

Robinhood offers two tiers of investment accounts: a free version and a premium version. With its free version, you can choose to trade individual stocks, ETFs, options, and cryptocurrency in real time. And like M1 Finance, Robinhood offers fractional-share investing, so you don’t necessarily need a lot of money to start investing.

Robinhood offers taxable and tax-advantaged accounts. The taxable accounts can be brokerage, margin, and crypto accounts. The brokerage account allows for investing in US stocks, ETFs, and ADRs in a taxable account. The margin account offers the ability to borrow money for stock purchases but requires Robinhood Gold and a minimum of $2,000 in the account. The crypto account enables the buying, selling, and trading of cryptocurrencies. 

The tax-advantaged accounts come in the form of Robinhood Retirement, which gives you access to traditional and Roth IRAs and offers qualified deposits a 1% match.

Robinhood’s real-time trading ability might make it an attractive option for investors who are interested in making trades frequently. Robinhood also offers detailed educational materials to help you learn how to invest money, which can be a big help if you’re a new investor. Robinhood also offers the option to set up a Roth or traditional IRA.

If you want to upgrade to Robinhood Gold, you get access to research tools and the ability to trade on margin. It costs $5 per month and includes the ability to borrow up to $1,000. Borrowing beyond $1,000 requires paying 2.5% interest.

Read our Robinhood review.

What both investment apps excel at

Both M1 Finance and Robinhood excel in many of the same areas.

Investment options

Robinhood and M1 Finance let you invest in stocks, ETFs, and cryptocurrency — some of the most popular investment types. Additionally, Robinhood provides options and ADR investment choices.

Fractional-share investing

Both platforms offer fractional-share investing, which can be helpful for new investors who don’t have a ton of money to diversify their portfolios. For instance, with fractional shares, you have the option to purchase 1/10th of a $200 share stock for $20 rather than having to save $200 for a full share. This can free up more of your budget to purchase fractional shares in multiple companies or funds rather than just putting all your money in one place.

No commissions to trade

M1 Finance and Robinhood don’t charge commissions to make trades. This lack of trading fees could potentially save you a lot of money if you’re planning to make trades often. It also comes in handy for long-term investors as well.

Recurring investing

Both Robinhood and M1 Finance offer recurring investments. Recurring investments allow you to choose a set interval, such as bi-weekly, to invest a predetermined amount of money you choose. The feature allows you to build your portfolio without having to remember to submit a new buy order each payday.

7 important differences between M1 Finance and Robinhood

M1 Finance and Robinhood have distinct differences that may make you want to choose one trading platform over the other.

1. Minimum balance requirements

Robinhood doesn’t require a minimum balance to get started. M1 Finance requires a $100 account minimum to open an individual taxable account and $500 to open a retirement account. Robinhood is the clear choice here if having no minimum account balance requirement is important to you.

2. Account types

Robinhood offers an individual taxable investment account, a cash card, along with traditional and Roth IRAs. M1 Finance provides taxable brokerage accounts, joint brokerage accounts, traditional IRAs, Roth IRAs, SEP IRAs, and trusts. If you’re looking for varied account options, M1 Finance wins this category.

3. Investing options

Robinhood lets you invest in stocks, ETFs, ADRs, options, and crypto. M1 Finance limits you to stocks and ETFs, and crypto. If you’d like the option to invest in options or cryptocurrency, Robinhood could be the better choice for you. Neither offers investment in mutual funds.

4. Upgrade fees and services

Upgrading to Robinhood Gold costs $5 per month. It gives you access to in-depth research, access to margin trading, and more. 

M1 Finance has one platform for all users, so it's the winner in this category as all members can access all services. 

5. Trading windows

Robinhood offers real-time trading for investors, whereas M1 Finance does not. M1 Finance limits you to a two daily trading windows per day. If you’re interested in day trading, Robinhood could be the better choice of the two.

6. Portfolio building and maintenance

Robinhood allows you to buy investments but doesn’t manage them on your behalf. M1 Finance lets you choose a pre-built expert portfolio, or you can opt to customize your own portfolio. M1 Finance also automatically rebalances your portfolio to align with your ideal portfolio allocation when you buy more investments. If you’re interested in automated portfolio management, M1 Finance outshines Robinhood in this area.

Which investment app should you choose?

Figuring out which of the best brokerage accounts is ideal for your needs boils down to a few key factors.

Automation vs. control

M1 Finance’s features, such as automatic investment schedules, may be valuable for investors who prefer to take a more hands-off approach to portfolio management. The option to trade in real time with Robinhood and its wider selection of investment options likely make it the better choice for more hands-on investors.

Cryptocurrency

If you understand how to buy cryptocurrency and are interested in investing in cryptocurrency, you have fewer crypto options with M1 Finance. If this is important to you, Robinhood might be a platform worth considering.

Account types

Robinhood offers an individual taxable brokerage account and traditional and Roth IRAs. Although these options could be sufficient for you, depending on your needs, M1 Finance allows you to choose from many more options. If you want to invest using a joint brokerage account, traditional IRA, Roth IRA, SEP IRA, or trust account, M1 Finance could be the better choice.

FAQ

Bottom line

Robinhood and M1 Finance are a couple of the best investment apps. They provide a variety of investment options for you to choose from. 

Robinhood could be the better choice for hands-on investors who prefer to manage their investments themselves with real-time trading, cryptocurrency, and options support. M1 Finance doesn’t offer as many investment types but uses recurring investments to simplify portfolio management, which can be appealing to more hands-off investors. 

The right option for you depends on your priorities and investment goals.