M1 Finance vs Robinhood: Best Free Investing App (2022)

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 fractional investing, 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 referral bonus (or free share of stock) from either M1 Finance or Robinhood if you join either program through the links on this page. If so, thank you and happy investing. img 634ebacc4d01a

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 summarizing 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 9:29 am Eastern for the trade to execute the same day. Premium members can access an afternoon window instead.
  • 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 robo-advisor 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 four characteristics of Platform B:

  • Can buy or sell shares at any time during normal market hours
  • Can purchase fractional shares of stocks and ETFs with $1
    • Partial shares can be purchased with a minimum $1 investment per stock or ETF
  • Your portfolio allocation is dollar-based instead of percentage-based
    • Maintaining or rebalancing your portfolio can be more time-consuming
  • Can trade cryptocurrency futures (i.e., Bitcoin, Ethereum, Dogecoin)

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 $30 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

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.

There is a premium option called M1 Plus ($125/year) that offers an afternoon trading window. However, to avoid day trading frequency patterns, most investors will only trade once per day.

If you miss the morning window, M1 executes your trades during the afternoon window.


Robinhood is more like a traditional online broker like Fidelity or Vanguard.

It helped pioneer the “free investing app movement” but it also has a negative reputation for some system outages and its lax options trading restrictions in the volatile trading days of 2020 and 2021.

You can buy fractional shares of practically any stock or ETF that trades on the US stock exchanges with a $1 minimum investment per ticker.

Also, Robinhood lets you trade cryptocurrency futures (if you like this 21st-century investment idea).

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.


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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:

  • Two daily trading windows
    • Only the afternoon window is open to M1 Plus members
    • You must submit your buy and sell orders before 9:30 am Eastern for the trade to execute the same day if you're using the free version of M1 Finance.
  • 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 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
      • This can make it easy to make sure your portfolio remains balanced

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.

The banking features are optional and handy but not as valuable as the investing features.

M1 Finance Fees

It's 100% free to invest with M1.

There's also a premium feature called M1 Plus that costs $125 per year and 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 930 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
  • Free checking account
  • Access to a portfolio line of credit

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 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 (with the free version of M1 Finance).

Personally, I recommend a free online bank account if you want free ATM access and an interest-bearing checking account.

M1 Plus Fees

Upgrading to M1 Plus costs $125 for the first year. M1 Finance sometimes runs discounts to upgrade at a lower cost. You may decide to test M1 first before upgrading to M1 Plus.

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 opening at 3 p.m. Eastern
  • 0.25% discount on M1 Borrow cash loans
  • 1% cash back on debit card purchases
  • 1% APY interest on M1 Spend checking account deposits

While I have an account with M1, I'm not planning to upgrade to M1 Plus anytime soon.

For me, the most appealing perk is the second trading window. As M1 isn't built for short-term trading, one window in the morning is sufficient for most investors.

Disclosure: M1 Plus is a $125 annual subscription offering products and services from M1 Spend LLC and M1 Finance LLC, both wholly-owned, separate but affiliated subsidiaries of M1 Holdings Inc. 

*Your free trial (a $31.25 value) begins the date you enroll in the M1 Plus subscription, and ends 90 days after (“Free Trial”). Upon expiry of the Free Trial, your account is automatically billed an annual subscription fee of $125 unless you cancel under your Membership details in the M1 Platform.

M1 Finance 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 $25 of new money to execute trades.

M1 Finance 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.

Here is a step-by-step look at the investment process:

  1. Browse stocks and ETFs
  2. Add stocks you want to invest in into your “Basket”
  3. Assign a target asset allocation to each position in the investment pie
  4. Fund account to meet the investment minimum
  5. M1 buys shares at the next trading window

With M1 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 the investment strategies of these investment options:

  • Target date retirement funds
  • Hedge funds
  • Fixed income
  • Socially responsible investing.

Portfolio Rebalancing

Because M1 makes you assign each holding a target percentage, you can enjoy their free automatic rebalancing option. They call it “dynamic rebalancing”.

M1 Finance only buys shares and never sells shares without your permission. You will need to request a manual rebalance to sell shares that are overperforming.

When you invest new money, M1 automatically invests your cash into the holdings that are underallocated.

For instance, let's say you have General Mills stock 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 (10% in this example).

On the flip side, 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).

Instead, M1 Finance buys shares of the other assets so they “catch up” with the outperformers.

Manual Rebalance

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 like TD Ameritrade, Schwab or Fidelity.

Instead, M1 puts the dividend income into your cash account. The next time that balance reaches $25, M1 invests the cash to rebalance your portfolio.

Investing Rewards Credit Card

M1 Finance now offers a $0 annual fee rewards credit card. You can earn cash rewards that deposit into your brokerage account.

The Owner's Rewards Card by M1 offers these perks:

  • Up to 10% back at select companies (i.e., Amazon, Target, Netflix, etc.)
  • 1.5% on all non-bonus purchases
  • Get M1 Plus for free for one year ($125 savings)
  • No annual fee

As of July 1, 2022, the APR (annual percentage rate) for the Owner's Rewards Card by M1 will range from 16.49%-26.49%, instead of 15.74%-25.74%


  • 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 free daily trading window–must place orders before 9:29 am EST for same-day execution
  • Must meet account minimums to begin trading
    • Taxable accounts: $100
    • Retirement accounts: $500
  • $25 minimum for subsequent investments
  • 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.

Their “fame factor” is partially because of their aggressive advertising on social media and other news programs. They were also one of the first investing apps to not charge trade fees.

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

I only use Robinhood to buy stocks and ETFs. Now that Robinhood offers fractional investing, it's even easier to invest small amounts of money.

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 like M1 Finance offers.

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.

Even then, you only need $1 per trade as you can buy fractional shares of stocks and ETFs.

Robinhood desktop platform
A glimpse at the Robinhood desktop platform

Investing Experience

I have a little bit of money at Robinhood. I first joined when my regular broker still charges $5 per trade.

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. Now that traditional brokers offer free trades, Robinhood isn't as impressive as it once was.

If you do your research elsewhere, like with a stock screener tool, 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.

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. It depends on your asset allocation preference to manage risk tolerance.

My Robinhood account is where I make my riskier investments that I can sell during the day if I want to instead of waiting to tomorrow's trading window.

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).

Fractional Investing

While late to the party, Robinhood now supports free fractional investing for stocks and ETFs. The investment minimum is $1–like M1 Finance.

This minimum can still be lower than “big name brokers” like Charles Schwab or Fidelity ($5 minimum).

You may also prefer fractional investing with Robinhood because you have dollar-based shares instead of percent-based investing like M1 Finance.

And, you only need to invest $1 instead of the $25 minimum that M1 requires for each trade.

The $1 minimum investment is one reason I like Robinhood. This low minimum and the being able to buy stocks on-demand lets me invest in aggressive stocks that Motley Fool Rule Breakers and other stock newsletters recommend.

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.

Dynamic rebalancing is one benefit of assigning a target allocation percentage like your employer 401(k). Use M1 Finance for automatic rebalancing if you want to make portfolio management as easy as possible.

Another option is using Blooom to manage your IRA (note: I might earn an affiliate commission if you signup for Blooom).

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 doesn'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
  • $1 minimum trade to buy new shares
  • Buy fractional shares of stock and ETFs ($1 minimum per trade)
  • Can trade options (for experienced investors only)
  • 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.


  • Options and Bitcoin investing can be risky for inexperienced investors
  • No IRA account option
  • No automatic rebalancing
  • Robinhood has more negative publicity than M1 Finance

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.

Robinhood vs M1 Finance

Here's a quick summary of the differences between M1 Finance and Robinhood.

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 within an investment pie
  • Like assigning a target allocation to each holding
  • Want an IRA investment account
    • Robinhood only offers taxable accounts

Get a cash bonus when you join M1 Finance.

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.

If you join Robinhood, you can get one free stock. This stock is usually worth less than $10 but can be worth more.


M1 Finance is great if you want to buy partial shares of stocks and ETFs.

Robinhood is better if you want the typical online broker experience like E*TRADE or Fidelity and also want the ability to trade crypto and invest with $1 fractional shares..

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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Josh founded Money Buffalo in 2015 to help people get out of debt and make smart financial decisions. He is currently a full-time personal finance writer with work featured in Forbes Advisor, Fox Business, and Credible.