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M1 Finance Review

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

M1 Finance is an online investing platform that combines robo-advisor functionality with certain features more typically found on conventional broker platforms. This makes M1 Finance a somewhat unique product: It offers curated investment portfolios for different goals and risk tolerances, together with the ability to build your own investment portfolios.

No matter which way you choose to compile your investments, M1 Finance lands squarely in the robo-advisor camp, as it manages them for you automatically and handles all the necessary rebalancing. M1 offers taxable, trust and retirement accounts, and users can open up to five accounts under one login. Best of all, M1 charges no annual management fees.

M1 Finance
Visit M1Securedon M1 Finance’s secure site
The bottom line: This highly customizable robo advisor is a good option for investors who have gotten beyond the beginner stage, as well as more experienced investors.

  • Build your own investment portfolios choosing from an array of stocks and exchange traded funds (ETFs)
  • M1’s curated investment portfolios give you preset options
  • Robo-advisor technology and dynamic rebalancing keep your investments on track

How does M1 Finance work?

M1 Finance refers to investment portfolios as “pies,” and the different stocks and ETFs added to each portfolio “pie” as “slices,” which you may find either charming or goofy. When you sign up with M1 and choose your first pie — one designed by M1, one with “slices” you’ve selected yourself, or a mix of the two — the platform shows you how it would have performed over the last 10 years (this is called a “backtest” in the professional investing world).

After establishing a portfolio “pie,” you complete a quick series of questions about yourself, including income, net worth, liquidity, and investment time horizon. M1 then asks you to link up a bank account to fund your investments. Once linked, you can fund your first pie, and may choose more portfolio pies.

If you decide to build your own portfolio pies, you can choose from more than 4,000 individual stocks and more than 1,900 ETFs. Each pie can hold up to 100 slices. M1 requires a minimum balance of just $100, and charges no fees to manage your portfolios. M1 makes its money from interest on cash deposits, interest on margin loans, and through the annual fee on their optional M1 Plus membership, among other things.

For users who want the platform to choose investments for them, M1 Finance offers curated pies, from target retirement portfolios (sorted by conservative to aggressive) to socially responsible investing portfolios. There’s even a “Cannabis Pie” that offers exposure to publicly traded cannabis producing, manufacturing and distributing companies.

Who should consider M1 Finance

M1 Finance has features that would appeal to both journeymen and more experienced investors. The latter will like the build-your-own portfolio option, while all users will appreciate curated portfolios based on things like your target retirement date or your desired mix of stocks and bonds. If you feel comfortable choosing your investment approach, you can set up automatic investments that will fund your account over time.

For true beginners, the M1 platform might be a little too DIY. Although you can choose from the site’s pre-selected investment mixes, there are no recommendations based on your time horizon or other measures — you’re on your own to select one. If you need help, there are no advisors available, as with some other robo-advisors — you must submit a support request via contact form.

M1 Finance fees and features

Current promotions

Current M1 clients get $25 off their first year of M1 Plus, M1's premium product.

Stock trading fees
  • $0 per trade
Amount minimum to open account
  • $100
Tradable securities
  • Stocks
  • ETFs
Account fees (annual, transfer, inactivity)
  • $0 annual fee
  • $100 full account transfer fee
  • $100 partial account transfer fee
  • $20 inactivity fee
Commission-free ETFs offered
Mutual funds (no transaction fee) offered
Offers automated portfolio/robo-advisor
Account types
  • Individual taxable
  • Traditional IRA
  • Roth IRA
  • Joint taxable
  • Rollover IRA
  • Rollover Roth IRA
  • Trust
Mobile appiOS, Android
Customer supportPhone, Email

Strengths of M1 Finance

  • No fees: M1 charges no fees to manage your portfolio, and requires only $100 to start investing, after which you can invest in increments of $10. There is, however, an inactivity fee if you have less than $20 in your account and there’s no activity for 90 or more days, and the site charges to close accounts: $100 for outgoing transfers, for instance, and $100 to terminate each IRA.
  • Customizable portfolios: Unlike some robo-advisors that lock you into their investment selections based on your risk tolerance, M1 Finance gives you a lot of leeway. You can select your own stocks and funds you’d like to go into your investment pie, or you can go with one of the site’s professionally curated pies, such as “Moderately Aggressive” or “Responsible Investing.” You can also choose a combination of the two approaches, filling part of your pie with your picks and part of your pie with theirs.
  • Fractional shares: M1 allows investors to buy fractional shares of stocks and funds, so every dollar you point toward your portfolio will be used when you purchase investments.
  • Rebalancing: Using a method it calls Dynamic Rebalancing, M1 will rebalance your portfolio as you deposit and withdraw cash, and the site will reinvest your dividends once your cash balance reaches $10, or whatever threshold you’ve chosen.
  • Additional features: With M1 Borrow, users with accounts with a balance of at least $10,000 can borrow up to 35% of their portfolio at 4.25%. M1 Spend allows users to keep cash in a checking account, and if you sign up for M1 Plus for $125 a year (currently on special for $100), you’ll earn 1.5% APY on your cash.

Drawbacks of M1 Finance

  • Too much freedom: Unlike most robo-advisors, which typically recommend pre-baked investment portfolios for you based on your answers to questions about goals and risk tolerance, M1 lets you invest in whatever you want. This could be bad news if someone loads up their portfolio with stocks without doing any research, or might be overwhelming for an investor who wants more hand-holding.
  • Not much guidance: The site’s setup includes questions like, “What is your liquid net worth?” without any explanation for beginners about what that might mean. The site also asks users to rate their risk tolerance — low, medium, high — without any accompanying details. Many other robo-advisors provide greater amounts of background detail on the investing process, and offer more advice for novice investors.
  • Not for day traders: M1 makes trades just once every day, during the “trading window,” at 9 am Central Time. If you’re looking to capitalize on daily stock price fluctuations, this may not be your ideal platform.
  • No tax-loss harvesting: Although M1 uses a tax minimization strategy to reduce the taxes you owe when you sell securities, there is no tax loss harvesting offered. When you request a withdrawal from your account, an algorithm sells securities in the order of: losses that offset future gains, lots that result in long-term gains, and then lots that result in short-term gains.

Is M1 Finance safe?

M1 Finance has all of the typical protections in place. It is a registered broker/dealer with the Financial Industry Regulatory Authority (FINRA), a member of the Securities Investor Protection Corporation (SIPC) and carry SIPC insurance that protects against the loss of cash and securities held by a customer up to $500,000. They also have supplemental SIPC insurance, and M1 Spend and M1 Plus accounts are FDIC insured up to $250,000.

M1 has also taken measures to protect personal information. Your data is never stored on any device, and all information is encrypted in transit and at rest. The connection to your bank is managed via an electronic key — M1 doesn’t store your bank credentials.

Final thoughts

M1 Finance offers features that will appeal to both experienced and beginner investors, from highly customizable portfolios to pre-set investment mixes that users can set on auto-pilot. Although there’s not much guidance on the site, users can open an IRA, choose a target date retirement mix, set up automatic investments and they’re set — or they can fill a portfolio with 100 individual stocks and ETFs of their choosing. With no management or trading fees, users are paying just the expenses on the investments themselves, and you can invest as little as $10 at a time. Compared to other robo-advisors charging higher fees and offering fewer investment options, there’s a lot to like here.

Open a M1 Finance accountSecured
on M1 Finance’s secure website

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Ashford
Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate here

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Your Guide to the Roth IRA Rules

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

Knowing all the Roth IRA rules is a key competency for anyone saving for retirement. The first thing to understand is that you fund your Roth IRA with money on which you’ve already paid income taxes. That means you pay no income taxes on withdrawals.

“Every dollar you take out of a 401(k) is not a true dollar — you’re going to have a tax liability,” said Rob Greenman, a financial planner in Portland, Ore. “The idea of having some assets that are growing tax-free, and being able to withdraw the amount in retirement and keep every nickel, that’s pretty cool.”

Other big benefits of a Roth IRA include the absence of any requirement to start taking required minimum distributions at age 70 ½, as with other types of retirement accounts. You can leave money in your Roth and pass it on to your heirs or your favorite charity, if you so choose. Plus, you can withdraw contributions at any time, period, without paying any penalties — that’s a big advantage over many other forms of retirement account. (To withdraw earnings without penalty, however, you’ll need to wait until you turn 59 ½, and the account must have been open for at least five years).

Read on for a full brief of all the Roth IRA rules — we’ve got you covered.

Who can open a Roth?

Among the basic Roth IRA rules is that you must have earned income. Anyone can open a Roth so long as they have reported income to the IRS below certain income thresholds (more on that in a sec). A teenager with a part-time job could open a Roth IRA, but a kid earning cash in the summer mowing lawns can’t open a Roth (unless they claim it as income — but what kid does that?).

“It can’t be, ‘My mom paid me to babysit,’” Greenman said. In general as long as you’re working and have either W2 or 1099 income, you can put money into a Roth.

Non-working spouses or spouses with very low wages can also open a spousal Roth IRA. You must be married and filing a joint tax return to make this possible.

How much can you contribute to a Roth IRA?

In 2019, investors can contribute up to $6,000 to a Roth IRA, or up to $7,000 if they’re 50 or older; in 2018, investors could put away up to $5,500 and $6,500, respectively. How much you can save in a Roth also depends on your income — and above certain thresholds, you’re not eligible to contribute at all:

Roth IRA Contribution Guidelines
Tax Filing StatusModified Adjusted Gross Income (MAGI)Contribution Limit
Single < $122,000$6,000 ($7,000 if 50 or older)
≥ $122,000 but < $137,000Partial contribution*
≥ $137,000Not eligible
Married filing jointly< $193,000$6,000 ($7,000 if 50 or older)
≥ $193,000 but < $203,000Partial contribution*
≥ $203,000Not eligible
Married filing separately< $10,000Partial contribution*
≥ $10,000Not eligible
*If you fall into a partial contribution category, use Fidelity’s calculator to determine how much you can save.

There are a few other Roth IRA rules to understand when it comes to contributions:

  • The max applies to all IRA contributions. Although you can contribute to a traditional IRA and a Roth IRA in the same year, your total savings over both accounts cannot exceed $6,000 (or $7,000 if you’re 50 or older).
  • 401(k) contributions are a separate bucket. If you have an employer-sponsored retirement plan, such as a 401(k) or 403(b), your can contribute the maximum allowed to it and a Roth IRA.
  • Anyone can open a Roth IRA. As long as you have earned income, you can contribute to an IRA, whether you’re 75 or 15. (Generally, parents take the lead on opening a Roth for their child.)

You can open a Roth IRA at any broker or robo-advisor that offers the account, such as Vanguard, Schwab, Fidelity, Wealthfront or Ally. Look for a company that provides access to the investments you want, and pay attention to the costs involved.

“You should focus on fees, because those fees eat into the returns that markets provide,” Greenman said, advising that whichever company you work with, there are some questions you should make sure to ask: “What are the available investment options, what are they going to charge to buy or sell investments, and what are the underlying expenses of the investments you’re buying?”

When can I withdraw money from a Roth IRA?

Generally, a Roth IRA works like any other retirement account — you can start withdrawing money at 59 ½. But there are some other things to know. For instance, you can withdraw your contributions from your Roth IRA at any point, no matter how old you are, and you won’t owe taxes or pay a penalty. There are different Roth IRA rules for the earnings, however. Here’s how it breaks down:

You’re under age 59 and a half

If you withdraw earnings — rather than contributions — from your Roth IRA before age 59 ½, you may owe taxes and penalties. However, you might only owe taxes but no penalties in the following situations:

  • The funds are being used to buy your first home (up to a $10,000 lifetime max)
  • You’re paying for qualified education expenses
  • An injury leads to total and permanent disability, or death of the account holder
  • The money is being used to pay for health insurance if you’re unemployed
  • You are paying for unreimbursed medical expenses that are more than a certain percentage of your adjusted gross income
  • The distribution is made as part of a series of substantially equal periodic payments
  • The money is a qualified reservist distribution

You’re age 59 ½ or older

You can withdraw contributions at any point without paying any taxes or penalties. However, if you withdraw earnings, you’ll owe taxes if the account is less than five years old.

What if I make too much money to contribute to a Roth?

If your income is too high, making you ineligible to open a Roth IRA, there’s still a way in. It’s called a backdoor Roth IRA.

A backdoor Roth involves putting money into a traditional IRA account, and then converting the account to a Roth IRA. If you haven’t paid taxes on the money yet, you’ll need to do that as the conversion is considered income in the year it takes place. If you have other IRA accounts and they aren’t all pre-tax — you’ve paid taxes on some money, but not on all of it — it may be worth consulting a financial professional, as the tax calculation can get complicated.

In any given year, you can convert as much of your traditional IRA to a Roth IRA as you want, as long as you’re prepared to pay the tax bill. In other words, you’re not limited to $6,000 if your balance is higher than that.

It’s also worth noting that there are different withdrawal rules for money that’s been converted to a Roth. All converted money — both contributions and earnings — must be in the account for five years before you withdraw it, or you’ll pay a 10% penalty; in addition, note that the clock starts on Jan. 1 of the year in which you convert.

When do I have to start taking distributions?

With some retirement accounts, you’re required to start withdrawing a minimum amount from the account each year starting at age 70 ½; this is true for traditional IRAs.

However, if you own a Roth IRA, there is no required minimum distribution age. “You can just leave it there for your great grandkids,” said Jon Ten Haagen, a financial planner in Huntington, NY. “You don’t ever have to take it out.”

This is a nice thing on two levels. First, it gives you more control in terms of your tax situation, so if you’re not looking to draw down income in a given year, you don’t have to take any funds out of your Roth. Second, it’s a great way to earmark funds for an inheritance.

“Not only are you going to be giving money away, but you’re going to be paying the tax up front,” Greenman said. Your heirs can even inherit the money and leave it invested — they’ll have to start taking distributions, but they can stretch the distributions over the course of their lifetime, allowing the balance to continue its tax-free growth. “It’s super powerful,” Greenman said.

The bottom line on Roth IRA rules

For eligible investors, a Roth IRA provides valuable savings diversification and flexibility. You can withdraw contributions at any point for any reason, and you can take out earnings tax-free for specific situations (first home, education). Earnings grow tax-free and can be withdrawn tax-free as long as you’re 59 ½ or older and the account is at least five years old — or you can leave the account for your grandchildren. If you have the ability, it’s a versatile tool to add to your portfolio.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Ashford
Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate here

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Review of Rize Savings App

Editorial Note: The content of this article is based on the author’s opinions and recommendations alone. It has not been previewed, commissioned or otherwise endorsed by any of our network partners.

In a sea of micro-savings and investing apps, there’s another offering coming from Rize. The savings app hasn’t launched yet, but there’s plenty of information in the site’s FAQs to get a feel for how the app will work.

With Rize, customers can either save their money in an account that earns a set interest rate, or invest it in a mix of stock and bond exchange traded funds (ETFs). Users will be able to set goals with time horizons and then set up schedules for automated savings toward those goals.

Though the premise is simple, Rize is missing a basic component: FDIC insurance for its savings accounts. The company claims that because your account will be a brokerage account, all money will be covered with Securities Investor Protection Corporation (SIPC) insurance, though this raises some potential issues.

“In general, SIPC protection is determined on an asset-by-asset basis and extends only to cash in a customer’s account that is on deposit for the purchase of securities,” said Ken Tumin, founder of

If you’re interested in what the app will offer, here’s how it breaks down.

Rize savings account vs. Rize investing account

This app offers two distinct ways to save: You can choose to simply save money and earn 2.15% APY (as of August 30, 2019), or you can invest your cash. If you invest, your money will be put into stock and bond ETFs based on your time horizon. In general, the faster you need the cash, the more conservative the investment approach will be.

The site doesn’t discuss investment returns. The investment mix (stocks vs. bonds) will vary based on how quickly you plan on using the money you invest. You can’t adjust the mix, beyond tweaking your time horizon for a goal, and you can’t choose your investments. Rize uses just two ETFs for investing: Vanguard Total World Stock and Vanguard Total Bond Market.

Brokerage services for Rize are provided by Apex Clearing Corporation.

How does the Rize account work?

Although it’s not possible to test drive the savings app since it hasn’t launched yet, opening an account appears to be as simple as inputting your personal information and linking a bank account for funding. There is no account minimum requirement.

Once you’ve linked your bank, you can create and name your goals and then add a target date and/or an amount you’d like to save. You’ll then set your deposit schedule, and it will automatically save for you each month or week, or based on whatever schedule you set. Note that you can only set one deposit schedule overall.

For each goal, you can opt to either have the money saved or invested by toggling from “cash” to “invest.” The app will help you calculate how much you’ll need to save on a monthly basis to meet your goals. It also will suggest a “cash” or “invest” approach based on your time horizon, but you can choose to follow or ignore the advice.

If you choose “invest,” the app will put your money into ETFs —a mix of stocks and bonds and, if your time horizon is short, cash — based on when you need the money. Unlike many other robo advisors, the app doesn’t ask any questions about risk tolerance, since “research shows we as people aren’t all that great at judging our risk tolerance,” Rize states.

It takes five to seven business days to buy or sell investments.

Does the Rize app charge account maintenance fees?

It has an unusual fee structure. The savings aspect of the account operates on a kind of choose-your-own-adventure schedule where the end user decides how much to pay each month. You can contribute $3, $2 or even nothing at all. There are no other fees and no minimums.

On the investing side of the account, the app requires a minimum fee of $2 per month, plus an annual management fee of 0.25%. The site points out that this is a quarter of the 1% fee you’d pay with a traditional financial advisor, but it’s comparable to robo advisors that offer far more functionality, and even slightly higher if you’re investing a small amount because of the $2 additional monthly fee.

Is my money safe with Rize?

Rize deposits aren’t FDIC insured. This is troublesome, since FDIC insurance protects deposits in federal banking institutions up to $250,000 per depositor, and Rize bills itself as a “full bank replacement,” enabling customers to “manage spending through our Rize Checking Account,” according to Molly Moran Edling, head of marketing at Rize.

It states that user funds are SIPC-protected up to $200,000 for cash and $500,000 for invested assets. SIPC coverage protects cash and securities such as stocks, bonds or mutual funds in accounts at SIPC-member brokerage firms. And indeed, brokerage services for Rize are provided by Apex Clearing Corporation, which is an SIPC member.

That said, cash on deposit with a brokerage for the sole purpose of earning interest isn’t protected by the SIPC, according to Josephine Wang, SIPC president, “even if held at an SIPC member firm.” In other words, the money you have on the “save” side of the app would not be insured.

The company did not respond to questions about its SIPC coverage, but the folks at the SIPC were clear about the status. “SIPC has not been approached by Rize for confirmation of SIPC protection,” Wang said. “SIPC is not working with Rize prior to Rize’s account rollout nor would it be SIPC’s practice to do so.”
This means is that, unlike a traditional savings account, if you use Rize to save money (and not to invest), and the Rize operation goes under, you could potentially lose your nest egg with no recourse. That’s a decidedly risky proposition.

This is something that’s come up before, such as when stock trading app Robinhood offered checking and savings products and claimed they’d be insured by the SIPC — and then quietly withdrew its cash management offerings when it became clear that the SIPC wouldn’t cover them.

“Now it looks like Rize is going down that same road,” Tumin said. “I wouldn’t be surprised if they decide on a different model.”

Rize savings app noteworthy features

  • Competitive interest with no fees: The app offers high-interest savings with the option to pay no fees, although the lack of FDIC protection takes a bit of the shine from this feature.
  • Multiple savings goals: You have the freedom to save for anything you want, and you can create as many goals as you’d like.
  • Built-in features to help you save more: Accelerate, one of the site’s two “Power Ups,” will automatically increase your savings contribution by 1% each month. Boost, another Power Up, will keep an eye on your checking account and transfer “a bit of spare change” once or twice a week, up to 5% of your monthly savings.

Alternatives to the Rize savings app

There are other options available for saving your money, although they have different pros and cons to consider as well.

Chime — FDIC-insured checking and savings accounts

Chime is essentially a no-fee checking and savings account, albeit one that earns almost no interest. (The savings account earns0.01%.) There is no option to invest your money. That said, Chime has partnered with The Bancorp Bank to provide FDIC insurance, so that’s a plus. If you’re looking for a no-frills place to stash your cash, Chime is an option, but you won’t earn much of anything in interest.

Simple — FDIC-insured cash management account

Simple offers a combination of a checking account (earning 2.02% APY on balances of $.01 or more) and budgeting tools, including a Safe-to-Spend feature that shows you how much of your balance is available after setting aside money for your spending categories and savings goals. Choose goals and elect to save over time, and Simple will move money automatically into your “goal” savings at preset intervals. Money in a Simple account is held by BBVA USA and is FDIC insured up to applicable limits. For people looking to earn a little on savings, this is a safer choice offering a similar interest rate.

Acorns — Micro-investing for beginners

Acorns is a micro-investing app that rounds up your purchases to the nearest dollar, deposits the spare change into your account and then invests in ETFs every time you’ve saved at least $5. You have the option of investing your money in a taxable investment account ($1 a month), a taxable investment account plus IRA accounts ($2 a month), or all of the above plus a checking account ($3 a month), which could get pricey for small balances.
You can choose from five different ETF-based portfolios ranging from conservative to aggressive, but it may take a while to amass much, since you’re saving in small amounts. While Acorns offers the option to earn cash back from selected retailers, there is no interest offered on the checking account. Acorns investments are SIPC-insured and its checking account is FDIC-insured.

Is the Rize savings app right for me?

Although it’s possible that the company will make material changes to its model before the app launches, in its current state, there are better (and safer) places to put your money. While it is offering a healthy interest rate on savings, with the option of no fees, experts have concerns about the safety of your money in an account that is not FDIC insured.

On the investment side, if you’re new to investing and you’re happy to let the algorithm manage your money, this may not be a bad place to start. But fees here are comparable to other robo-advisors with vastly more functionality, more investments to choose from and more control over your investment mix.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Kate Ashford
Kate Ashford |

Kate Ashford is a writer at MagnifyMoney. You can email Kate here