With so many investing and trading platforms, it can be difficult to choose which is best for you. Recently, a variety of commission-free trading platforms have emerged. In this article, we are going to review two of the top trading platforms available today: Webull and M1 Finance.
Webull is a commission-free brokerage that has no account minimum and offers 2 FREE stocks once you sign-up and fund your account with $100.
M1 Finance offers free stock and ETF investing as well as prebuilt portfolios. With a $100 minimum ($500 for retirement accounts) you can get started using M1 Finance for free.
The platforms are similar in many respects. However, they are tailored toward two very different types of investors.
Let's break these two platforms down to determine which one is best for you.
Webull is best for intermediate to advanced investors because of its focus on in-depth analysis and a wide variety of tools. This platform is sleek and easy to use although it may be overwhelming for beginner investors. Think of Webull as a more advanced version of Robinhood. Webull does not offer fractional shares but does offer other services like a free virtual trading simulator and crypto trading.
M1 Finance is colloquially known as the finance super app because it aims to provide all the necessities of a healthy financial life. This platform offers tools for those interested in investing, borrowing, and spending their cash. The investing features are unique with the ability for users to create their own portfolios and invest in several hand-picked stocks at once.
Both M1 Finance vs Webull are free trading platforms, but they differ in a few areas. M1 Finance offers free portfolio building using stocks and ETFs. Webull offers a trading platform where users can exchange stocks, ETFs, and options. M1 Finance offers fractional shares and tax minimization but has a $100 minimum.
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Webull Review 2021: Best Free Investing App? |
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Download Webull | |
M1 Finance Review 2021: Best Free Investing App? |
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Download M1 Finance |
M1 Finance was launched in 2015 and is an online robo-advisor and brokerage hybrid for everyday people who want to invest in stocks or exchange traded funds (ETFs).
M1 Finance combines features of a traditional brokerage account with a modern robo-advisor. First, you select your investments and your allocations. Then, you automate the entire portfolio! Check out our detailed review of M1 Finance here.
M1 Finance focuses on low-cost passive investing with additional features such as automatic rebalancing, professionally built portfolios, and tax minimization strategies. The only fees you pay are the fees associated with any ETFs you invest in. M1 Finance is a completely free investing platform!
The comprehensive feature set of M1 Finance makes it an attractive choice compared to many of the other free investing apps on the market.
M1 Finance operates by creating portfolios of stocks and ETFs called “Pies”. You can customize your pie and choose the specific stocks and ETFs that you want to add to your portfolio. For example, you could build a pie with 50% Tesla stock and 50% Google stock.
Within each pie, you can have up to 100 stocks or ETFs. Each can carry a different weight in the portfolio. There is no limit on the number of pies you can have in your M1 Finance account! For example, you could have one growth-oriented pie and one income-oriented pie in your M1 Finance account.
M1 also offers pre-built pies that are free to invest in, these are called expert pies. You can invest in these pre-built portfolios based on your investment time horizon and personal preferences.
It is important to understand that these portfolios or expert pies are not tailored to any one person. Each investor has a unique set of circumstances. If you want a personalized portfolio, you should consider a robo advisor like Betterment or a financial advisor. Betterment is another cutting-edge platform that saves investors money by leveraging technology.
Most investing platforms charge an asset management fee in exchange for any kind of investment guidance. M1 Finance offers these pre-built pies for free. They do not charge any fees outside of the ETF expense ratio. This expense is present regardless of the platform you choose to invest with.
M1 Finance also allows you to buy fractional shares of a corporation within your pie. For example, if your M1 Finance account has a balance of $1,000 but you would like to buy a share of Amazon for $3,000+, you can purchase a partial share of Amazon to hold in your portfolio. With fractional shares, you can buy as little as 1/10,000th of a share!
This keeps more of your money invested and less idle cash sitting on the sidelines. It also prevents a high share price from being a barrier to your investing.
M1 Finance offers investors the ability to take advantage of retirement accounts including IRAs, Roth IRAs, SEP IRAs, and even trust accounts.
These accounts allow for a reduction in the tax liability due on your investment gains provided you don't withdraw your cash until retirement. Additionally, trust accounts provide the ability to plan for future generations and ensure your wealth lives beyond your life.
The M1 Finance platform offers a free checking account in addition to the investment tools available. With the M1 Finance basic account, you won't earn any interest or be eligible for any cash back when spending on the debit card you are issued.
However, by upgrading to M1 Plus ($125/year), you'll earn an above-average APY on the account and get 1% cash back on all of your spending on the card. This comes in addition to multiple other features and perks exclusive to M1 Plus users.
As a platform that focuses on passive investing, M1 provides a host of features that aim to simplify and automate the investing process.
First, you are able to set up automatic recurring deposits into your M1 Finance pies. This allows you to follow a dollar-cost averaging strategy without the discipline or time that doing so would typically require.
Personally, I have a recurring deposit set up every 2 weeks to deposit $100 into my M1 Finance portfolio. This keeps my portfolio growing without me needing to do anything.
The next automation feature that sets M1 Finance apart is Smart Transfers. Smart Transfers take recurring deposits up a notch by creating logic-based rules for your M1 Finance account.
For example, if you know you want to keep $1,500 in your checking account at all times and invest any money above that amount, Smart Transfer is a great solution. M1 will monitor your checking account and whenever the balance is over that threshold, the rest will automatically be moved to your investments.
Currently, this feature is only open to M1 Plus investors but it's possible that over time it could be rolled out to a wider audience.
For investors looking for additional features beyond what M1 Finance Basic offers, they can choose to subscribe to M1 Plus. This $125 per year service will provide four main benefits not included in the standard M1 Finance Basic features.
Clearly, most users won't need M1 Plus. However, for some these features will be well worth the price tag.
M1 Finance has a great platform for long-term investors. In most cases, the ideal user for M1 Finance is someone who is a somewhat passive investor, relatively fee sensitive, and does not want to spend a significant time managing their investments.
M1 Finance offers a greater amount of flexibility because you can choose exactly what you invest in. Most other robo-advisors limit you to a handful of ETFs.
M1 Finance is also a great platform for dividend investors. Your dividends will be automatically reinvested back into your portfolio once the cash balance exceeds $10. Other free investing platforms like Robinhood and Webull do not offer any kind of automated dividend reinvestment. Typical brokerage accounts that offer dividend reinvestment and fractional shares charge a fee for this service.
Webull is a commission-free stock and ETF trading platform. It is ideal for the active trader who is looking for a more dynamic user interface. Webull has a variety of features that benefit traders such as technical indicators, research agency ratings, financial calendars, and free margin trading as well as short selling, options trading, and crypto trading.
With easy access to margin, research tools, and live data, Webull has built an ideal platform for active traders. Check out our detailed review of Webull here.
Webull is a platform that is designed for the intermediate trader who already has some experience with the stock market. If you are a complete beginner, you might experience information overload.
If you sign up via our link, you will two free stocks! You just have to open an account and fund it with at least $100. Webull also frequently raises their promotion to multiple stocks, so make sure to check the button below to see how many stocks they are giving away.
Technical Indicators: Webull has a variety of technical indicators available on the platform. You can choose from up to 22 technical indicators such as moving averages, relative strength indexes, and more. Here is the full list in our complete Webull review.
Virtual Trading Simulator: Webull has a useful feature called the virtual trading simulator. This feature lets you create a virtual portfolio with fake money to test out strategies before risking real money. This is an ideal feature for someone just starting out who may need to gain more investing knowledge and know-how before investing real money.
Smart Alerts: Webull lets you set a variety of alerts for different holdings. You can get an alert when a price level is hit, or a rate of change has hit a defined level. There are also alerts for volume levels or changes, this can be useful for traders to get a sense of where the stock may be headed in the short term.
Financial Calendar: The financial calendar feature keeps you informed on all the latest and upcoming financial news. Important events such as upcoming IPOs, dividend payouts, and earnings releases are all provided to you in a calendar format on the Webull platform.
Margin Trading: Webull allows margin trading on its platform to certain users. You must have a minimum account balance of $2,000 for margin trading access. Check out this site for Webull's margin interest rates.
Extended Hours Trading: Webull offers after-hours and pre-market trading. You can trade securities from 4 am to 8 pm on the Webull platform offering more flexibility in placing trades.
Commission-Free Short Selling: There are no trading commissions to short a stock in Webull. Short selling occurs in a margin account, but all trades are completely free.
Free Crypto Trading: Webull now allows users to trade four different cryptocurrencies on their platform. These are Bitcoin, Litecoin, Ethereum, and Bitcoin Cash. It's likely that as time goes on, Webull will add more cryptos to invest in but time will tell.
Webull is ideal for active traders who focus on investment research. Webull provides an array of research tools for both technical and fundamental investment researchers.
In most cases, this platform is best for those with some prior investment experience. If you are completely new to investing in the stock market, you might be overwhelmed by the number of research tools available to you.
But if you have experience trading in the market, Webull will likely have many of the features you have been missing out on with other free investing apps.
If you sign up via our link and fund your account with at least $100, you will get 2 free stocks!
M1 Finance and Webull are both very powerful investing platforms. A decade ago the features available on these platforms were only offered by the best and most advanced investment companies to wealthy individuals. Now, with so many platforms available to the retail investor, people have a wide variety of options to choose from.
We believe M1 Finance and Webull offer two different services that each meet its own target user. In most cases, M1 Finance is a good platform for someone who is investing for the long term and using a relatively passive investing approach.
Whereas Webull fits best with more of an active trading style. Investors who use technical indicators and those who need to make more frequent trades would be better off using the Webull platform. In the end, both platforms are free so you can always give both a try and see which is best for you!
