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M1 Finance: As Legit As It Gets

When you’re thinking about ways to invest your money, whether or not the platform you are looking at is secure, legitimate and insured is about as important of a first question as you could possibly ask. The service M1 Finance has many attractive features for investors, including no account minimums, no management fees and a great degree of flexibility in allowing for portfolios designed by a robo-advisor or customized by you. But above all else, it’s completely legitimate, secure and insured. If you are wondering is M1 Finance FDIC insured, you have nothing to worry about. 

Why Does Insurance Matter?

M1 Finance is a comprehensive platform with features that can serve most of your financial needs. You can build your investment portfolio without management fees, but you can also access other services such as M1 Borrow (a credit service) and M1 Spend (a checking and spending service). With the ability to borrow up to 35% of the value of your portfolio through M1 Borrow, it’s definitely important to know that you are working with an insured provider. 

But there’s another reason to feel good knowing that M1 Finance is FDIC insured – your retirement nest egg. The platform offers IRAs (Individual Retirement Accounts), both the traditional type and Roth IRAs. There are some slight differences between the two types of accounts: for example, traditional IRAs use pre-tax contributions and are taxed at withdrawal, whereas Roth IRAs are the opposite.

 But what they have in common is more relevant to the insurance question. These retirement savings vehicles allow you to invest up to $6,000 per year, or $7,000 if you’re over 50 and have some catch-up room, meaning that it’s possible to accumulate a significant amount of money in your M1 Finance Roth IRA. For that reason alone, it’s important that M1 Finance is FDIC insured.

Is M1 Finance a Good Tool?

With the confidence of having answered is M1 Finance FDIC insured, it’s worth considering the many features that make this a good platform to invest. For one thing, it’s free – hard to believe in the online investing world, but there are $0 in management fees no matter the size of your account. You also gain access to flexible credit and checking services, and have the option of building out your portfolio using their unique ‘pie’ system. You can add pies to your portfolio (such as a stock pie) and then customize the slices (individual assets) that make up your pie. Or, if it’s easier you can simply use M1 Finance’s expert-built pies for automated and management free investing. 

Worth Considering M1 Plus?

Like many financial and investment platforms, M1 Finance also offers a premium service known as M1 Plus. It’s different from most in that it is still relatively affordable – it only costs $125/year, which is closer to what you might expect many services’ basic offerings to start at. Additionally, new users get M1 Plus for $0 for the first year, making it virtually risk free to see if it is a product that could meet your needs.

While M1 Finance is a powerful tool that will perform well for many investors, M1 Plus brings a little bit more to the table. M1 charges fees on other products in order to allow it to offer 0% management fees on your investment portfolio, and it is through M1 Plus that these fees can be minimized. M1 Finance users will pay 3.5% to borrow through M1 Borrow, but that’s cut down to 2% for M1 Plus users. There are other added features, such as enhanced opportunities for cash back and more reimbursements for ATM fees. These would both have the potential to deliver you good savings if you have chosen to use M1 Spend for checking or debit services. It’s definitely worth it to explore if your savings will exceed the $125 annual fee.

M1 Finance already has several smart features that make investing easy, such as tax minimization and automatic portfolio rebalancing. But M1 Plus goes a little bit further, allowing users to set up smart transfers where a certain amount is transferred between your M1 accounts when they reach or exceed a pre-set level. Unfortunately, tax loss harvesting is not a feature of either M1 Finance or M1 Plus.

The Final Word: M1 Finance FDIC Insured

Frankly, you would be making a big mistake to park your money with an investment platform without checking to see if it is insured. The answer to the question is M1 Finance FDIC insured is a resounding YES, meaning that on top of all of its other user friendly features to help you grow your portfolio, you can be assured peace of mind and security when investing with M1 Finance. After all, the security of your key assets including your Roth IRA is not a matter to take lightly.

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