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Written by Logan Robison on November 10, 2021
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M1 Finance vs Public 2024: Best Investing App?

From connecting with and following friends and other investors on Public to creating and diversifying your own portfolios with M1 Finance, these two investing platforms stand out from the crowd.

Both platforms offer great features such as fractional shares and $0 trading commissions. These features allow newer and less-experienced investors to feel confident that they have the right opportunities to invest and get the most out of every dollar.

However, when you take a peek under the hood, these are vastly different platforms. Here are the similarities and differences between M1 Finance vs Public.

M1 Finance vs Public: The Basics

M1 Finance is an app designed for long-term investors. The app is built on the idea of "investment pies" that allow investors to set their target allocations and contribute on a consistent basis. This creates a streamlined and hands-off process without charging any fees whatsoever.

Public is also a platform built for long-term investors. However, the Public platform does not provide nearly the levels of automation that you will find on M1 Finance. The app is designed around buying fractional shares and ties in a social aspect to investing. By following other investors, you can see what stocks they are trading and learn from others.

Both apps provide simple interfaces that are accessible for even complete beginners to the stock market. They also both encourage investors to hold for the long-term. Shorter-term traders will likely find an app like Webull to better fit their needs.

FeaturePublicM1 Finance
Account Minimums$0$100 for brokerage; $500 for retirement
Account Types AvailableTaxableIndividual, Joint, IRA, Trust
Dividend ReinvestmentYesYes
Unique FeatureSocially-Enabled TradingCustom-Built Portfolios
Fractional SharesNoYes
Additional FeaturesN/ACash Management, Borrowing Capabilities

Public vs M1 Finance: Summary

  • Public allows investors to interact with other investors through chat and comment functions
  • M1 Finance offers an array of products in investing, borrowing, and spending
  • Public offers new users a free $10 stock slice when they sign up while M1 Finance has no sign up incentive
  • Both offer fractional shares and prebuilt investment portfolios
  • M1 Finance offers retirement accounts while Public does not
  • Public has an open trading window while M1 Finance only offers 1-2 per day
  • M1 Finance has intelligent automation features such as automated rebalancing
  • Public is more focused on the social aspect of investing
  • Both offer stock and ETF trading commission free

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What Is M1 Finance?

M1 Finance is a platform used by over half a million investors who have invested over $4 billion on the platform. The platform’s main focus is to help investors get ahead by offering stellar products in three categories: Investing, Borrowing, and Spending.

The platform calls itself the Finance Super App, and through the features listed, it's clear why the app deserves that title. M1 aims to be a one-stop-shop for young people's finances and so far they are doing an effective job.

The company's philosophy is to make investing more accessible to the average Joe. Specifically, M1 believes that anyone is capable of reaching their goals through low-cost long-term investing. The platform is tailored specifically to long-term investors and provides complete transparency.

M1 Finance is free for all who want to use the basic account features. However, M1 Finance also offers a premium package called M1 Plus. This comes at a price tag of $125 per year. While this may be costly for some, M1 Plus comes with many benefits that might make that extra $125 worth it.

Account Minimum

While the account is completely free, while there is a $100 minimum for initial investments with brokerage accounts and $500 for retirement accounts.

There are no commission fees on any of the 6,000 stocks and ETFs that trade on the platform.

In an effort to cut down on costs, all M1 Finance trades are placed in 1-2 windows. Normal users have access to 1 trading window per day in the morning. If you have M1 Plus, you will get access to a 2nd afternoon trading window as well.

Custom Portfolios

M1 Finance’s value is in the ability to create your own custom portfolios. Then, you can put it on autopilot with a number of useful features.

You will also be able to specify the exact percentage of your portfolio you want to go toward each company. This is an incredible and unique benefit for investors because it allows users to structure their portfolios to match their investing style.

If creating your own portfolio isn’t your style, use one of M1 Finance’s 30+ expert-built portfolios.

M1 Finance has some of the best features for passive, long-term investing. However, it is not ideal for active trading due to the 1-2 trading windows per day.

Fractional Shares

Like Public, investors can purchase portions of a share, instead of the whole thing. By doing this, several barriers to entry are eliminated for new and less wealthy investors.

M1 Finance allows you to purchase as little as 1/10,000th of a share of any stock or ETF offered for trading on their brokerage. That means you can buy a piece of large stocks like Amazon for under $1!

With fractional shares, you can take advantage of the ability to create your own custom portfolio for as much or as little as you can afford (above $100).

Rebalancing Tools

With automatic rebalancing, M1 Finance makes sure that your investments stay at the thresholds you have designated. For example, if you have designated that Amazon in particular, will only make up 15% of your portfolio, automatic rebalancing will make sure it says that way.

In essence, this is causing your portfolio to automatically follow Warren Buffet's time-tested advice to "buy low and sell high." When a stock goes down in value, you'll automatically buy more of it to bring your portfolio back up to the target levels.

If automatic rebalancing isn’t your preferred choice, there are also one-click rebalancing capabilities to make sure your investments stay on track. Keep in mind, using the one-click rebalancing could lead to a taxable event within your portfolio.

Dividends can also be automatically reinvested, and when this occurs your portfolio will be automatically rebalanced as well.

Dividend Reinvestment Program

M1 offers all users the ability to take advantage of a portfolio-level DRIP.

A DRIP takes the dividends that your stocks pay and automatically invests them back into your portfolio to buy more shares of stock.

This ensures that you don't have extra cash sitting on the sidelines and allows you to take full advantage of compound interest.

Retirement Accounts

On M1 Finance, you're able to choose from a brokerage account, joint account, retirement account, or trust account.

M1 offers 3 types of retirement accounts for investors to choose from, Traditional IRA, Roth IRA, or SEP IRA. Each account will work slightly differently, but all of them will provide investors with tax advantages if they are saving for retirement.

For younger investors, the M1 Finance Roth IRA will likely make the most sense. However, you'll want to make sure to do your homework and make sure that you pick the type of account that best suits your circumstances.

M1 Borrow

If you are looking to borrow money from your portfolio, check out M1 Borrow.

Once you have $10K invested with M1 Finance, you qualify for a line of credit with up to 35% of the portfolio’s value.

One of the advantages of a portfolio line of credit is that you'll typically be able to qualify for a relatively low-interest rate. That's because this is a secured debt. Unlike a credit card, your portfolio line of credit will have your stock portfolio as collateral.

With M1 Plus, you are able to borrow at a base rate lower than the standard M1 offering. Interest rates start at 5.0%, but with M1 Plus, individuals receive interest starting at 3.5%.

M1 Spend

As an M1 Finance user, you can access a checking account and debit card to keep all of your finances in one place. M1 Finance offers many benefits such as a $0 minimum balance, cash back options for M1 Plus members, and ATM fee waivers.

By setting up direct deposit into your M1 Spend account and allocating funds directly into your investments, you can follow the age-old wisdom of paying yourself first.

This removes much of the discipline required to be a consistent investor over time and will ensure that you are dollar-cost averaging over time.

Additionally, M1 Plus users ($125 per year upgrade) will receive an above-average interest rate on the cash held in their account and 1% cash back on all purchases made on their debit card.

M1 Credit Card

M1 recently released their new metal credit card, the Owner's Rewards Credit Card. This card gets 1.5% cashback on all purchases. However, at one of over 70 participating companies, you can earn up to 10% cashback. If you own stock with a company that you are making a purchase with, then you qualify for 2.5%, 5.0%, or 10.0% cashback.

These companies include Amazon, Walmart, Home Depot, and Netflix. To see the full list of companies and their accompanying percent, be sure to check out the credit card.

This card is available to all M1 members who apply and are accepted. M1 Plus members will get the annual fee waived while non-M1 Plus members will have a $95 annual fee.

M1 Finance Pros

  • Automatic rebalancing ensures you are buying low and selling high
  • 30+ expert portfolios for totally passive investors
  • Tax-minimization features keep your portfolio efficient
  • Retirement accounts offered to save on taxes
  • Ability to buy fractional shares
  • Access to borrowing against your portfolio at a low interest rate
  • Free checking account and debit card to keep all your finances in one place

M1 Finance Cons

  • One trading window per day makes active trading not feasible
  • $100 minimum balance to start ($500 for retirement accounts)

What Is Public?

Public has brought something new to the investing app space by merging two completely different worlds: investing and social media.

Public allows investors to collaborate with like-minded individuals who share a passion for building wealth. Connecting and chatting with friends and meeting new investors while analyzing investment opportunities is just one side of Public.

Social Investing

Public allows you to connect with and follow your favorite investors and friends. See where they have invested and chat with them about their decisions. Like many other social media platforms, you will be able to see a feed of actions taken by investors you follow.

Don’t let this feature intimidate you knowing that others might be able to see your stock moves. Instead, recognize that this is an opportunity to learn from those with potentially more experience. This is a great chance to get feedback on your strategy from advanced and seasoned investors. But if you really don't want to share your trades, you can set your profile to private.

Account Minimums & Commissions

There is a $0 minimum to open an account on Public. To get started investing, the minimum stock slice you can purchase is $5.

In addition, rest assured that you are paying $0 in trading commissions.

Fractional Shares (Stock Slices)

This feature is one of the greatest innovations in modern-day investing. The ability to purchase stocks in dollar amounts as opposed to full shares is a huge advantage for Public over several other brokerage accounts.

Instead of saving up to purchase an expensive stock like Amazon, you can attack that slowly by investing a certain dollar amount as frequently or as infrequently as you want until you own an entire share.

With Public, you can invest as little as $5 in a company. When you don't need to wait to buy a full share, you can get more of your money invested sooner and put your capital to work.

Fractional shares is another feature that has leveled the investing playing field and one that makes Public stand out from the crowd.

Investing Options

Public has over 5,000 stocks to choose from and as mentioned above, come with no commission fees. One of the greatest features of Public is the ability to search for stocks by industry as opposed to searching individually.

Included with a description of the company is information like trends, comments, and company history. The platform also includes list of subsidiary companies that the company owns. This allows you to be relatively informed before making an investment decision.

You can also spend your hard-earned cash on ETFs from leading firms like BlackRock, Fidelity, and Vanguard. These firms certainly know how to build top-performing portfolios of stocks so investing with them is often an intelligent route.

Public also offers numerous investment portfolios called Themes that are free to invest in as well.

Instant Deposits

Most investing accounts link to a bank account and then have you fund your account with an ACH payment. This can take around 3 business days. While this is also true for Public, they also offer funding through a debit card.

When transferring funds into Public using a linked debit card, the transfer is instant! This is certainly a unique feature that members love.

Public Pros

  • Fractional shares mean you can invest as little as $5
  • No account minimums or commission fees
  • Social aspect with chat and activity feed
  • Learn from other experienced investors on the platform
  • Access to world-class ETFs from leading firms
  • Free $10 stock slice when you sign up
  • Instant deposits

Public Cons

  • No retirement accounts
  • Limited research tools and data
  • No ability to day trade on the platform

The Verdict: M1 Finance vs Public

While both platforms are effective for helping investors create portfolios that match their goals, there are a few important considerations to take when deciding between the two.

M1 Finance is designed for long-term, passive investing. You can put your entire portfolio on autopilot using the automation tools and features such as auto-rebalancing and dividend reinvestment. Additionally, the platform contains over $4 billion and has a longer track record behind it.

Public, on the other hand, is meant for a more active trader who wants to invest socially. As a newer platform, they lack many of the features of M1 Finance but are quickly expanding their platform to be more comprehensive.

With both of these brokerages, share price is not a barrier to investing thanks to fractional shares. However, you will only find tax-advantaged retirement accounts with M1 Finance.

If you have under $100, you can't open an account with M1. However, Public will be happy to serve you with $0 minimums!

At the end of the day, both are free, so you can try out both of them and see which works better for you!

Article written by Logan Robison
Logan graduated with a degree in finance from Brigham Young University and currently works in merchandising for a large retailer. In his free time he loves to hike and camp with his wife and son. Logan is also heavily involved in real estate investing and owns properties in Utah and Arkansas.

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