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M1 Finance vs. Interactive Brokers [2023 Review]

Last Updated: March 22, 2022 2 Comments – 4 min. read

m1 finance vs interactive brokers

If you’re looking to invest with zero commissions and low margin rates, chances are you’ve run across M1 Finance and Interactive Brokers. Let’s get right into comparing the two.

Disclosure:  Some of the links on this page are referral links. At no additional cost to you, if you choose to make a purchase or sign up for a service after clicking through those links, I may receive a small commission. This allows me to continue producing high-quality, ad-free content on this site and pays for the occasional cup of coffee. I have first-hand experience with every product or service I recommend, and I recommend them because I genuinely believe they are useful, not because of the commission I get if you decide to purchase through my links. Read more here.

M1 Finance vs. Interactive Brokers – Summary Comparison

M1 Finance

Interactive Brokers

Commissions

$0

$0

Fees

$0

$0

Account Types

3/5
3/5

Investment Products

3/5
5/5

Customer Service

4/5
4/5

Research Tools

3/5
4/5

Margin

5/5
5/5

Mobile App

5/5
2.5/5

Interface/Usability

5/5
2.5/5

Checking Account

Yes

No

Fractional Shares

Yes

Yes

Auto Rebalancing

Yes

No

Dividend Reinvestment

Yes

Yes

Order Control

No

Yes

Summary Score

4/5

4.2

3/5

3.2

Summary Review

M1 Finance will be much easier to navigate than Interactive Brokers for novice investors. If you don't need all-day trading and if you want access to automatic rebalancing, M1 Finance is the better choice.

Interactive Brokers has some of the lowest fees and cheapest margin rates in the game. Unfortunately, their interfaces and mobile apps are severely lacking. If you are a day trader and need order control, go with Interactive Brokers over M1 Finance.

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Contents

  • M1 Finance vs. Interactive Brokers – Summary Comparison
  • M1 Finance vs. Interactive Brokers – Fees and Commissions
  • M1 Finance vs. Interactive Brokers – Account Types
  • M1 Finance vs. Interactive Brokers – Mobile App
  • M1 Finance vs. Interactive Brokers – User Interface
  • M1 Finance vs. Interactive Brokers – Customer Service
  • M1 Finance vs. Interactive Brokers – Minimum Deposit
  • M1 Finance vs. Interactive Brokers – Investment Products
  • M1 Finance vs. Interactive Brokers – Extra Features
  • M1 Finance vs. Interactive Brokers – Margin
  • M1 Finance vs. Interactive Brokers – Summary and Conclusion

M1 Finance vs. Interactive Brokers – Fees and Commissions

For U.S. investors, in relation to U.S. exchange-listed stocks and ETF’s, both M1 Finance and Interactive Brokers have zero commissions and zero account fees.

M1 Finance vs. Interactive Brokers – Account Types

M1 Finance offers taxable, Joint, Traditional IRA, Roth IRA, Rollover IRA, SEP IRA, Trust, and Custodial (M1 Plus members) accounts. They currently do not offer SIMPLE IRA, 401(k), Solo 401(k), 529, HSA, or Non-Profit accounts.

Interactive Brokers offers the exact same accounts with their IBKR Lite plan.

Note that M1 Finance is only available to U.S. customers. Interactive Brokers is available to customers in multiple countries.

M1 Finance vs. Interactive Brokers – Mobile App

M1 Finance has a sleek, intuitive, user-friendly, robust mobile app for both Apple iOS and Android:

m1 finance mobile app

According to users, the mobile apps of Interactive Brokers seem to be notoriously buggy and not well-supported. Here are some screenshots of the app:

interactive brokers mobile app

M1 Finance vs. Interactive Brokers – User Interface

To be frank, the Interactive Brokers interface is downright awful and antiquated. It will be especially confusing for a beginner investor. I would argue Interactive Brokers is definitely only suitable for sophisticated, seasoned investors and traders. Their user interface looks like this:

interactive brokers interface screenshot

The interface for M1 Finance, on the other hand, is extremely simple and intuitive with its pie-based visualization, and is perfect for beginner and seasoned investors alike:

m1 custom pies
m1 finance research filters screenshot

M1 Finance vs. Interactive Brokers – Customer Service

IB’s customer service is not horrible but not great. Customer service from M1 is comparable. Positive and negative anecdotes exist for both brokers. I’d say it’s a tie.

M1 Finance vs. Interactive Brokers – Minimum Deposit

Both Interactive Brokers and M1 Finance have no minimum deposit required.

M1 Finance vs. Interactive Brokers – Investment Products

Interactive Brokers is more suited for traders and allows the trading of stocks, ETF’s, options, and futures contracts, as well as forex, among other things.

M1, on the other hand, doesn’t have these things, and is better suited for long-term buy-and-hold investors of stocks and ETF’s. M1 offers most stocks and ETF’s listed on major exchanges.

M1 Finance vs. Interactive Brokers – Extra Features

Interactive Brokers doesn’t provide access to an integrable checking account like you can get with M1 Finance via M1 Spend. With their premium M1 Plus option, you can earn interest and cash back on that checking account.

Interactive Brokers has much more charting and technical analysis tools, albeit in a clunky interface. M1’s offerings here are pretty simple, but again, M1 is not designed for traders.

IB also doesn’t employ M1’s famous “dynamic rebalancing,” which strategically allocates new deposits to maintain your portfolio’s target allocations.

M1 Finance vs. Interactive Brokers – Margin

Margin rates between Interactive Brokers and M1 Finance are pretty similar. Both are extremely low. Margin rates are as follows for a $100,000 margin loan:

  • IB Lite – 2.55%
  • IB PRo – 1.55%
  • M1 Finance – 3.50%
  • M1 Plus – 2.00%

Perhaps the most important difference though is the fact that margin from Interactive Brokers can only be used to leverage your portfolio with them (i.e. buy more securities), whereas a margin loan from M1 Finance can be used for whatever you want – refinancing higher-interest debt, major purchases, unexpected expenses, etc.; it’s just a low-interest collateralized loan.

To access margin, IB has a minimum invested balance requirement of $100,000. M1’s requirement is only $5,000.

Remember that margin is an additional risk, including the risk of losing more than you invest. Margin is not available for retirement or custodial accounts. Rates may vary.

M1 Finance vs. Interactive Brokers – Summary and Conclusion

  • Both IB and M1 have no minimum deposit requirement.
  • Both IB and M1 offer commission-free trades and zero account fees for U.S. investors buying stocks and ETF’s.
  • M1 Finance and Interactive Brokers offer the same account types.
  • Interactive Brokers has a clunky, confusing interface that would only be suitable for sophisticated investors and traders. M1 Finance has a beautifully simple and intuitive interface.
  • Similarly, Interactive Brokers has a notoriously bad and buggy mobile app. The M1 Finance mobile app is sleek, intuitive, and robust.
  • Customer service should be comparable between the two.
  • IB offers some extra securities for traders like options, futures, and forex. M1 only offers stocks and ETF’s.
  • IB, being better suited for trading, has more charting and analysis tools than M1.
  • M1 offers “dynamic rebalancing.” IB doesn’t.
  • Margin rates between the two are roughly comparable, but M1’s margin loan can be used for anything you want. M1’s minimum invested balance to be eligible for margin is $5,000. IB’s minimum is $100,000.

I think M1 Finance slightly edges out over Interactive Brokers for the average retail investor due to the reasons above. Obviously, if you’re a sophisticated, active trader looking for a day trading platform, or if you’re interested in options, futures, and currencies, go with Interactive Brokers. If you’re simply looking for a platform for long-term, buy-and-hold investing, go with M1 Finance.

I wrote a comprehensive review of M1 Finance here if you’re interested in reading more about the nuances of the platform.

M1 Finance currently has a promotion for up to $250 when initially funding an investment account, as outlined below:

m1 seed promo 2022

They also currently have a transfer bonus promotion for up to $2,500 when transferring an existing account from another brokerage, as outlined below:

m1 transfer bonus 2021
Learn More
Sign Up for M1 Finance

Disclaimer:  While I love diving into investing-related data and playing around with backtests, I am in no way a certified expert. I have no formal financial education. I am not a financial advisor, portfolio manager, or accountant. This is not financial advice, investing advice, or tax advice. The information on this website is for informational and recreational purposes only. Investment products discussed (ETFs, mutual funds, etc.) are for illustrative purposes only. It is not a recommendation to buy, sell, or otherwise transact in any of the products mentioned. Do your own due diligence. Past performance does not guarantee future returns. Read my lengthier disclaimer here.

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About John Williamson

Analytical and entrepreneurial-minded data nerd, usability enthusiast, Boglehead, and Oxford comma advocate. I lead the Paid Search marketing efforts at Gild Group. I'm not a big fan of social media, but you can find me on LinkedIn and Reddit.

Reader Interactions

Comments

  1. Ajit dhake says

    August 2, 2020 at 5:47 pm

    Hi..would you suggest any platform providing custom pie for etfs on monthly basis..I am based in UAE..

    Reply
    • John Williamson says

      August 3, 2020 at 10:39 am

      Hi Ajit, unfortunately I don’t know any good brokers offering custom pies for investors outside the U.S. off the top of my head.

      Reply

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