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With half a million investors and a reported $6 billion worth of assets under management, M1 Finance is one of the most popular investing platforms around. From expert portfolios and low fees to automatic rebalancing and investor flexibility, there are plenty of reasons to consider M1 Finance. But you still might be wondering, “Is M1 Finance a safe investing app?”
It’s a good question. After all, part of growing your wealth is about keeping it safe. Fortunately, M1 Finance keeps investors’ money safe with SIPC insurance and cutting-edge cybersecurity measures.
Short answer: Yes, M1 finance is a safe investing app, but there are limits to its insurance coverage and investor protections.
Read on to learn how M1 Finance keeps your money safe.
Does M1 Finance Have FDIC Insurance?
Traditional savings and checking accounts are protected in case of issues with the bank that issued the accounts. Those accounts are covered by insurance from the Federal Deposit Insurance Corporation, or FDIC. However, stock market investments are not protected the same way. That means that M1 Finance does not have FDIC insurance coverage for investments in your portfolio.
While your investment portfolio is not covered with FDIC insurance, other M1 Finance banking products do have coverage. Users who have M1 Spend or M1 Plus Checking accounts may be covered by FDIC insurance up to a quarter of a million dollars.
Does M1 Finance Have SIPC Insurance?
While M1 Finance does not offer FDIC insurance on investments, they do have SIPC insurance. SIPC insurance covers your money if a brokerage firm fails. M1 Finance is a wildly popular and reputable company. But if for some reason it were to fail, your money is protected up to half a million dollars.
In addition to the typical SIPC insurance, M1 Finance wants its users to be covered above and beyond the SIPC limits. As a result, the clearing firm that M1 Finance works with has additional insurance coverage.
That’s one of many reasons why users can feel confident that M1 finance is a safe investing app.
Is M1 Finance Regulated?
Yes, M1 Finance is regulated. There is an independent group called FINRA, or the Financial Industry Regulatory Agency, that oversees US brokers and broker-dealers like M1 Finance. FINRA’s job is to make sure that everyone feels safe and confident when they invest. They aim to guard investors against fraud and bad practices.
And don’t just take our word for it! If you really want to feel like M1 Finance is a safe investing app, you can look them up on FINRA’s BrokerCheck. This resource allows individuals to take a deep dive into M1 Finance’s background and licenses.
Can I Lose Money with M1 Finance?
Yes, you can lose money with M1 Finance. But you can lose money with any investing platform. M1 Finance cannot guarantee how the stock market performs, which is why you should expect your account balance to ebb and flow along with the stock market itself.
Though your money isn’t protected for the ups and downs of the stock market, M1 Finance has SIPC insurance. Additionally, M1 Finance offers diverse investment options and portfolio rebalancing. That means that your money is about as safe as it gets in any investment account!
Is M1 Finance Legit?
M1 Finance is definitely legit. The platform was founded in 2015 and is now more than half a million investors strong. To make M1 Finance a safe investing app, M1 Finance prioritizes security. Data moves back and forth with military-grade encryption. That means your money is government-secret safe.
In addition to the 4096-encryption technology, M1 Finance also encourages users to activate two-factor authentication, sometimes called 2FA. Once you turn on two-factor authentication, you will use your M1 Finance password and an authenticator app to generate a one-time log-in code. This added layer of security is another way to make sure that there is no unauthorized access to your account.
What Other Ways Does M1 Finance Protect My Money?
M1 Finance is designed to help investors grow their wealth. No one can guarantee how the stock market will perform. Past growth does not guarantee future performance. But investing platforms like M1 Finance can help you invest strategically.
For instance, M1 Finance allows users to choose from nearly 100 expert portfolio options. You can also use their expert portfolios as a starting point and customize one to meet your specific needs.
Additionally, M1 Finance works with investors to consider their goals, their timeline, and their risk tolerance. They can’t promise that your investments will always increase. But they can make sure that your investment strategy aligns with your investment style.
Sometimes, the market fluctuates so much that your portfolio holdings might start to shift. M1 Finance uses automatic reinvesting and rebalancing to make sure that your portfolio always matches your needs.
Learn more about how M1 Finance can help you grow your wealth and hit your financial goals in our honest M1 Finance review.
Other Investing Apps To Consider
Though we think you can definitely say yes to the question “Is M1 Finance a Safe Investing App?”, it’s possible you might want to explore other investing platforms. That’s OK! We’d love to help. You can check out our favorite investing apps for 2022.
Additionally, here is a closer look at three other investing apps that are worth considering!
Public is one of our favorite investing app choices for investors who are looking to dive in right away. The app prides itself on making investing accessible to anyone. Seriously! You can get started with a single dollar!
Use Public to invest in fractional shares or build your portfolio however you’d like. Public allows investors to research investment choices by company and by theme. Themes range from Metaverse and Travel & Leisure to Women in Charge and Combat Carbon. These themes are another way that Public helps investors align their money with what matters to them.
Curious about the name? There is a social component to Public that allows investors to share what they are investing in. If you’re looking to grow your portfolio and explore different investing strategies, this is a fun and engaging feature that allows you to do that.
See our full Public review here.
Ally Invest is a fantastic investing option for individuals who want to streamline their money accounts. Ally offers one of the most popular high-interest savings accounts. So if you want to keep all of your money with one company, Ally Invest is worth exploring.
Take advantage of their robo advising options or build your own portfolio with low cost ETFs, stocks, and options. Investors can also trade on the Foreign Exchange Market, or Forex, with Ally invest. If you are looking to trade crypto, you’ll need to look elsewhere.
See our full Ally Invest review here.
Are you looking for a “set it and forget it” investing style that comes with support? Then Betterment might be the investing app for you.
Betterment was one of the first roboadvisors on the investing scene. If you want more support, you can upgrade from a digital investing plan to a premium investing plan. With a premium investing plan, you get access to human advisors.
Betterment also features Climate Impact and Social Impact portfolio options for investors looking to explore socially responsible investing.
See our full Betterment Review here.