Unpacking Automated Investing: Is M1 Finance or Acorns Your Perfect Match?
When it comes to automated investing, M1 Finance and Acorns are two highly recommended platforms. Trying to decide which one is the best fit for you? Here’s a simpler breakdown of both options to help guide your decision.
M1 Finance and Acorns offer different levels of control to investors. M1 Finance is favored by those who want more control over their investments, enabling the automation of investing but letting you decide what to invest in. On the contrary, Acorns is great for beginners who wish to invest with less control over specifics, as it automatically does it for you with few choices available.
M1 Finance brands itself as a “Finance Super App” aiming to be your all-in-one finance platform. It provides help in three areas: investing, spending, and borrowing. It’s free to create a basic account, and there’s a premium option, M1 Plus, costing $125 per year.
On the other side, Acorns, is a robo-advisor launched in 2014 with the goal of making investing accessible to everyone. It automatically invests your spare change from purchases into different portfolios using ETFs. In 2021, it managed $4.7 billion in assets and had 9.5 million regular users, with no minimum balance requirement, making it ideal for beginners.
When we take a look at M1 Finance’s key features, we see things like auto-investing, Portfolio Level DRIP, the ability to buy fractional shares of stocks or ETFs, and even expert portfolios without management fees. M1 also offers tax minimization features, a checking account (M1 Spend) and even a credit card (Owner’s Rewards Card) that yields up to 10% cashback. If you have a minimum of $10,000 in your M1 Finance account, you get access to M1 Borrow, enabling you to borrow from your portfolio at competitive rates.
In comparison, Acorns also has some unique features like portfolio options based on risk tolerance, an account for investing for kids (Acorns Early), retirement account options (Acorns Later), a debit card and checking account (Acorns Spend), and various cash bonuses through its partnership program (Acorns Found Money). However, Acorns doesn’t offer a margin feature.
Now, let’s talk about fees. Acorns has several subscription tiers starting at $1 per month and going up to $5 per month. M1 Finance, on the other hand, is free to use unless you opt for the premium M1 Plus account, which costs $125 per year.
Summing up, M1 Finance is ideal for long-term investors who are proactive or passive and want a bit more control over their investments. Acorns, however, is perfect for those who are new to investing and would prefer a more hands-off approach to growing their financial investments.
Finally, for your information, there are also other options for investment platforms including Public, Moomoo, and Webull, which offer features like commission-free trades of stocks and ETFs, as well as access to cryptocurrencies, fraction shares, and high-yield treasuries accounts. It’s essential to explore all these platforms before taking the plunge into the investing world.
