You don’t have to go to a financial advisor or have lots of money to start investing. Beginner investors have a lot of options thanks to technology. It’s important to research investment options, though, because brokerage firms have differences that matter when it comes to choosing the one that’s right for you.
M1 Finance and Stash are two brokerages that offer many different features and benefits. There are also some drawbacks to each. Read on to learn which investment platform might be a fit for your needs with our comparison of M1 Finance vs. Stash.
M1 Finance vs. Stash: Comparison
Here’s a look at some of the key features that you should keep in mind when considering M1 Finance or Stash when considering these two:
|Minimum Investment||$100 or $500 for retirement||$1|
|Management Fees||$0 to $125||$1 to $9 per month|
|Asset Classes||Stocks and ETFs||Stocks and ETFs|
|Account Types||Taxable, joint, IRA, trust accounts||Taxable, IRA, trust accounts|
|Mobile App||Yes, iPhone & Android||Yes, iPhone & Android|
M1 Finance vs. Stash: M1 Finance
Let’s start by talking about M1 Finance. They are a personal finance app that offers banking, borrowing, and investment.
The company was founded in 2015 with the belief that everyone should have access to investing.
M1 Finance does not work like the traditional robo-advisor, so your investments won’t be managed for you. Instead, you get to choose your own investments. You can choose between individual stocks or exchange-traded funds (ETFs) to build out your portfolio.
M1 Finance also has almost 100 investment pies that were developed by experts. Based on your risk tolerance you can select one of these curated portfolios that have different asset allocations.
Let’s look at all the things that M1 Finance offers now.
The Pie feature that M1 Finance offers is a simple, yet powerful tool. You can customize your pie to choose the stocks and bond funds that you want to invest in or choose one of their Expert pies. Some of the categories that M1 Finance allows you to choose from include:
- General Investing – This allows you to set your personal risk tolerance
- Plan for Retirement – Adjusted to your target retirement date
- Income Earnings – Focused on dividends and income returns for a more conservative account
- Just stocks and bonds – For those that want to trade stocks and bonds within their portfolio
Your account should be rebalanced as necessary. M1 Finance offers dynamic rebalancing so that your Pie Allocation is maintained. You also have one-click access to rebalancing on-demand whenever you want.
M1 Finance has two automatic investing features available on its investing platform. The first is the Auto Invest feature which you can turn on to ensure that your transfers are invested so your asset allocation is maintained.
The second feature that M1 Finance has available is its automatic investing schedule. When your cash balance exceeds an amount that you specify, it will be automatically invested.
Margin Loan and Margin Borrow
When you borrow money against your portfolio’s value, this is called a margin loan. M1 Finance allows you to follow as much as 35% of the value of your portfolio at a low interest rate. The interest rate that you’ll be charged when borrowing money is variable and follows the Federal Funds Rate.
The M1 Borrow feature is a nice alternative to other loan options when you have other personal finance goals like paying off high-interest debt. It strongly encouraged that you don’t use this feature to invest on margin, as this could put you in the risky spot of buying more than you can afford.
M1 Spend Bank Account
If you want an FDIC-insured checking account, M1 Finance has you covered with M1 Spend. They have two tiers of M1 Spend – the completely free M1 Spend and the premium M1 Plus.
The M1 Spend is included with all M1 Finance accounts so that you can easily manage money between the Invest, Borrow, and Spend pillars. There is only one trading window that this tier will give you access to.
You can receive paychecks, pay bills and use a debit card using M1 Spend. Its hard to justify making it your primary checking account however because it has 0% APY on checking and 0% on cash back.
M1 Plus is $125 a year that in addition to the features found in M1 Spend, you get a few more perks. This includes a 1.5% APY on checking, 1% cashback on purchases, a lower APR with M1 Borrow loans, access to a second trading window, and early access to M1 Spend. With the annual fee, it doesn’t make much sense to upgrade to this tier, even with the extra trading window.
If you are an M1 Plus member, you can get access to their Smart Transfers feature. It enables you to make transfers from your Invest to Spend account or vice versa using the rules you decide.
One-time transfers are always available. But what’s nice about Smart Transfers is that it can automate the process for you. For example, if you want to move $500 from your Spend account to your Invest account, whenever it reaches that threshold, the feature will automatically perform the transfer.
Access to Fractional Shares
How many shares of Google can you afford at over $2,500 a share? If you only have that much to spare in your bank account then it’s only one share.
Fractional shares allow you to buy pieces of stock. For example, with that $2,000 in your checking account, you could decide to put $500 towards Google, so that you own 0.20 shares.
M1 Finance was one of the first investment apps that allowed you to invest in fractional shares.
M1 Finance’s investing platform has a built-in tax minimization strategy so that you are paying the least amount of tax when selling pieces of your portfolio. Their algorithm will determine which Parts of Pie or stocks to sell while accounting for your portfolio targets.
This feature will ensure that your capital gains were obtained with tax efficiency in mind, without having to crunch the numbers yourself.
It’s important to note that this tax efficiency strategy is not tax-loss harvesting. The tax benefit of tax loss harvesting is that it sells off securities at a loss to offset the capital gains tax liability.
As an M1 Plus member, you can also open up custodial accounts for your children. Either a UTMA or UGMA account can be set up so that you can make contributions for your child.
As the custodian of the account, you are allowed to manage it. Your child is the beneficiary and owner of the assets that are found in the account.
There’s no maximum amount for contributions to these types of investment accounts and each deposit is considered an irrevocable gift. Custodial accounts have implications for financial aid so a 529 plan could be a better solution for college savings.
M1 Finance vs. Stash: Stash
Stash is another investment mobile app that’s ideal for beginner investors. You can choose from exchange-traded funds (ETFs) or stocks to quickly start building your account. The minimum balance requirement is $0 and Stash offers fractional investing so you don’t need a huge account balance to invest.
There are also budgeting tools that are built into the app which can help you build your savings. Your Stash account also gives you access to an online bank account and debit card.
Stash also will give you access to retirement accounts (Roth or traditional IRA), custodial accounts, bonuses to their reward program, and a monthly market insights report for a monthly fee. If you want a fully managed, automatically rebalanced portfolio, Stash offers its Smart Portfolios options (based on the monthly fee tier you select).
Here are some of the features that you can get with a Stash account:
Stash Invest Brokerage Account
Stash’s accounts require a monthly fee to get access to investing. There are no trade fees on top of this monthly charge. You can choose from three different tiers whose monthly fees increase as you move up.
This is the first option that charges a monthly fee of $1. With Stash Beginner, you receive a personal investment account, debit card/bank account, and can earn Stock Back.
$1,000 life insurance, savings tools, and personalized retirement advice are also included. The mobile app will also provide free financial guidance at this tier.
The next plan will charge a $3 monthly fee. Stash Growth includes access to retirement accounts, a taxable account (brokerage), and additional banking options. With a Stash Growth account, you will unlock their Smart Portfolios feature.
The last tier that Stash offers is available for $9 a month. Stash offers custodial accounts (two of them) for children in addition to the retirement account and taxable investment account.
Automatic Investing Tools
Their Auto-Stash feature allows you to get access to a range of automatic saving and investing tools. These tools allow you to save more so that you can invest more or put towards other goals.
Set a recurring schedule to save and invest.
A feature that reviews your spending habits to find “extra” money that is transferred automatically
Link a debit card to put your spare change to good use.
Stash Retire Retirement Accounts
The retirement investment option that Stash has is called Stash Retire. You have access to both a traditional and Roth IRA.
Use your Stash Retire account to contribute up to the IRA Contribution Limit. Long-term investors can get access to these retirement accounts with the Growth Plan.
With a Stash+ account, you can open up custodial accounts for your children. These types of accounts don’t necessarily have to be used for educational expenses.
These types of accounts do affect a student’s financial aid eligibility, so you might consider alternatives (529 plans). Contributions of up to $15,000 ($30,000 for married couples) per year can be made without having to pay a gift tax on these accounts.
A similarity that Stash shares with M1 Fiance is access to fractional shares. A minimum investment to earn one share on companies such as Google or Amazon is several thousand dollars.
The investing process is made much more accessible with fractional shares. These allow investors to include some of the best stocks and ETFs in their portfolios without a ton of money.
With its partnership with Green Dot Bank, you can also have access to banking features on the mobile app. You get a debit account that has no monthly maintenance or overdraft fees, a huge network of ATMs, Stock Back (a rewards program that allows you to earn stock for your debit card purchases), and ASAP Direct Deposit (ability to receive your paycheck up to two days early).
Having a cash account with no account fees is not the only benefit of the banking features. You also get:
Your purchases will round up automatically to the nearest dollar. When you have reached a minimum balance of $5 with your Stash debit card, the money is transferred to your account.
You can earn up to 10% cashback on your purchases. Up to three credit or debit cards can be connected to this feature. You can use the earnings to pick up some individual stocks or put them in your bank account to use in other ways.
You can pick up individual stocks and exchange-traded funds to create your ideal portfolio or have Stash do it for you. Smart Portfolios will automatically invest your money based on your risk tolerance. Investing involves risk, but Stash has created these portfolios based on extensive financial research.
Stash will move your portfolio according to your ideal Smart Portfolio and handle adding/removing cash on the investments.
You don’t have to worry about account fees or keeping a minimum balance on your bank account with Stash. But that’s not the only perk.
Stock-Back(R) rewards is a unique rewards program that allows you to receive stock when you make purchases with certain merchants. For example, if you shop at Walmart you can earn fractional shares from the company with your purchases.
If your shopping trips don’t always include a publically traded company, you can earn a percentage of your purchase back as an ETF.
M1 Finance vs. Stash: Benefits of Both
These two apps have several features that make them similar and compelling choices. Here is where these two competitors both excel:
With either M1 Finance or Stash, you will never be charged commissions on your trades. This means you have more uninvested cash to use for investing or other purposes.
Education and investment advice
Both the M1 Finance and Stash mobile app provides you with educational resources so you can learn more about investing.
Making a minimum investment in a company to gain one share is challenging with some of those top stock picks. M1 Finance and Stash allow you to purchase fractional shares so these companies are accessible to anyone.
Socially Responsible Investing
Both offer investors the opportunity to align their money with your values. You can feel good about where you’re putting your money with either M1 Finance or Stash.
Now ready to see how M1 Finance and Stash perform head to head? Let’s rate each mobile app based on factors that investors would want to know about these two.
M1 Finance vs. Stash: Costs
You have to pay anywhere from $1 to $9 to have access to Stash’s services. You don’t need to pay anything to start an account with M1 Finance.
The winner here is M1 Finance.
M1 Finance vs. Stash: Features
Both M1 Finance and Stash offer many different investment account types. M1 Finance will give you access to a simple brokerage account, joint accounts, a SEP IRA, a Rollover IRA, a Roth IRA, custodial accounts, and trust accounts.
While you can get similar account types with Stash, you need a higher-tier plan to get access to some of them.
Therefore, M1 Finance wins this category.
M1 Finance vs. Stash: Investing Methods
Stash has a limited selection of exchange-traded funds and stocks that are available on their mobile app. This is strange for a brokerage firm and means that you might not have all the assets you wish available. Many American Depository Receipts are also not available.
Mutual funds, bonds, options, and cryptocurrencies are also not offered with Stash invest options.
M1 Finance has these same drawbacks of not offering mutual funds, etc. The trading windows are both limited as well. These limited trading windows mean that you can’t send your orders to either M1 Finance or Stash.
But M1 Finance has its Investment Pies which allow you to create your portfolio based on distinct themes such as Responsible Investing. You can also create your own Pies to add whatever securities you wish.
Stash’s ETF portfolio builder allows you to create your account, but you have to pay a fee for every account with them.
The other advantage that M1 Finance has is that it has every stock and fund available, as well as many ADRs with their robo advisor app. Despite the limited trading windows that M1 Finance and Stash have, there’s a clear winner when it comes to the investing methods category.
This goes to M1 Finance.
M1 Finance vs Stash: Rebalancing
You can take advantage of M1 Finance’s “Dynamic Rebalancing” to rebalance your portfolio a little at a time when you deposit or withdraw money. This type of rebalancing is generally thought to be better than doing it on a specific schedule.
You can also rebalance with a simple click of the mouse in your dashboard view.
Stash doesn’t offer a rebalancing feature, so M1 Finance wins this category by default.
M1 Finance vs Stash: Tax-Loss Harvesting
Neither M1 Finance nor Stash offers tax-loss harvesting. But M1 Finance does practice tax minimization on their taxable accounts. The goal of this feature is to reduce taxes when selling securities.
Therefore, M1 Finance wins in this category.
M1 Finance vs Stash: Mobile Platforms
Having a solid mobile interface is incredibly important. Both of these brokers have created solid mobile apps that allow you to search for ETFs and stocks and submit orders.
M1 Finance and Stash are both missing advanced charting tools, however. They also both lack mobile check deposits which is a key miss for an online bank. M1 Finance does allow you to display charts horizontally, which you can’t do with Stash.
M1 Finance also wins this category.
M1 Finance vs Stash: Cash Management
Both of these firms will provide you with a free debit card that’s linked to a free checking account. Stash has some more features such as its Round-Up that allows you to automatically transfer your spare change to your investment account.
You can also use their Smart-Stash service to monitor your spending habits and move money to your account. Their Stock-Back program is highly unique, enabling you to earn fractional shares of stocks when you use your debit card.
None of these features are offered by M1 Finance which makes Stash the winner here.
M1 Finance vs Stash: Educational Material
M1 Finance and Stash both offer materials for informational and educational purposes. Since they are both robo advisor services that are geared toward newbies (neither offering access to human financial advisors), this is expected.
The materials for both firms are quite brief. You can find materials by growing learn.stash.com to find short articles with Stash’s service.
M1 Finance has new articles and short articles, a blog, and some personal finance topics.
Neither M1 Finance nor Stash particularly shine in this category however so we’re calling this a draw.
M1 Finance vs Stash: Margin Borrowing
M1 Finance offers you a margin account at the cost of 3.5%. If you upgrade to their paid plan, you can receive a 1.5% discount. M1 Finance members must have at least $10,000 in assets to borrow up to 35% of their account value.
Stash does not offer a margin account at this time so M1 Finance takes the win.
M1 Finance vs. Stash: Auto Investing
You have solid automatic investing features to keep you on track with your investing goals with both o these firms. Set up transfers to be automatically moved from your checking account to your investment account.
Your investments can also be automatically set based on the construct of your portfolio.
M1 Finance and Stash are a draw in the auto investing category.
M1 Finance vs. Stash: Customer Service
Your support hours with M1 Finance run weekdays from 9:30 am to 4:00 pm, Eastern. These hours also happen to align with the U.S. Market hours.
M1 Finance strongly emphasizes using their online help and FAQ sections to figure out problems on their own. They have onboarding guidance and an IRA rollover concierge too.
Stash does not have their support hours posted. They do list their email address and phone number on their website. Stash also heavily relies on their chat and FAQ section to help resolve their customer questions and problems.
Conclusion: M1 Finance vs. Stash
if you’ve been tallying things up so far, then you know that M1 Finance is the overall winner between the two online brokerages. The biggest difference between the two comes down to price. You can open up an M1 Finance account for free, while you’ll have to pay a monthly membership fee to get Stash.
M1 Finance also has more investment features such as access to trade stocks and ETFs found on the major exchanges, tax minimization, investing methods, and rebalances. Stash has some unique features like being able to earn fractional shares with companies you buy from and rounding up your spare change.
Ultimately, they are both great options for beginner investors. Their user-friendly tools can it easy to get started with investing without having to know a whole lot, and that’s the most important thing that you should be concerned with.
Want to learn more about how M1 Finance measures up as a robo-advisor? Check out our comparison of M1 Finance vs. Betterment to see how these robo-advisors stack up. Now go and get investing!