M1 Finance vs. Acorns: Which Investing App Wins?

Both M1 Finance and Acorns let you create investment portfolios, though the two platforms are very different. M1 Finance is free of charge and targets self-directed investors. Acorns has a monthly membership fee, but it is best suited for beginners who are struggling to save and don’t know how to start investing. Keep reading to learn more.

SustainFi   Updated December 19th, 2021

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At a glance

  • Both M1 Finance and Acorns can help you create investment portfolios, yet the two platforms are very different. The best option depends on what type of investor you are
  • Best for beginners: Acorns. Acorns is easier to use for beginners, letting you save and invest your spare change. You can fully outsource your investments to Acorns
  • Best for self-directed investors: M1 Finance. M1 Finance lets you easily create custom portfolios, buy fractional shares and borrow against your investment account

Keep reading to learn more.

Minimum investment


Minimum investment


Management fee

None ($125 / year for Plus accounts)

Management fee

$3-5 / month

Socially responsible investing


Socially responsible investing


Margin loans


Margin loans


Individual stocks


Individual stocks


Full-service robo-advisor


Full-service robo-advisor


What is M1 Finance?

M1 Finance is an investment platform rather than a full-service robo-advisor; it’s a cross between an online broker and a robo-advisor. M1 Finance offers an easy-to-use app that lets you build customizable portfolios (called “pies.”)

The pie portfolio model allows you to easily add a stock or an exchange-traded fund (ETF) as a piece of the pie. You choose what percentage to invest in each asset. If you don’t want to “bake” your own pies, M1 Finance comes with over 80 premade options. The app even offers two socially responsible pies. Besides, M1 Finance offers fractional shares and lets you borrow to invest.

Despite its flexibility, M1 Finance is a platform for investing, not for day trading. For example, you can only buy and sell during the daily trading window (two windows for M1 Plus members.) (If you are interested in trading more frequently, check out Public, a social investing app.)

Brian Barnes started Chicago-based M1 Finance in 2015. His startup has recently surpassed $4.5 billion in assets under management, raising over $300 million from investors like Softbank.

🔔 Read the full review of M1 Finance.

What is Acorns?

Acorns is a robo-advisor that lets you invest spare change from everyday purchases in diversified portfolios made up of ETFs. The company was launched in 2014 by the father and son duo, Walter and Jeff Cruttenden, to make investing accessible to everyone. Acorns has since expanded to retirement and checking accounts.

The robo-advisor grew its assets under management from $3 billion in 2020 to $4.7 billion in 2021. It has over 9.5 million users.

Acorns is best known for having no minimum balances, letting you save spare change and being beginner-friendly.

🔔 Read the full review of Acorns.

M1 Finance vs. Acorns: Account types

Both Acorns and M1 Finance support:

  • Individual and joint taxable investment accounts
  • Retirement accounts, including traditional, SEP, Roth IRAs, and rollover IRAs
  • Custodial (UTMA/UGMA) accounts for kids

💰 The winner: Tie.

M1 Finance vs. Acorns: Banking

Both Acorns and M1 Finance can set you up with checking accounts.

M1 Spend is a free savings account that comes with a Visa debit card. M1 Plus members get 1% APY on their money and 1% cash back on qualifying purchases. The account is FDIC-insured for up to $250,000. M1 Plus members get reimbursed for up to four ATM transactions each month.

Acorns offers checking accounts that come with a metal Visa debit card. The card offers free access to over 55,000 in-network ATMs. Your account is FDIC-insured for up to $250,000 and includes fraud protection, direct deposit and mobile check deposit options. Acorns Earn lets you earn bonus investments when you shop with over 350 brands like Apple, Chewy and Sephora.

💰 The winner: Tie. Although M1 Finance offers a higher APY, you need to be an M1 Plus member to qualify. Acorns gives every customer access to a large network of free ATMs and lets you earn rewards.

M1 Finance vs. Acorns: Minimum investment

Both Acorns and M1 Finance have low minimums compared to working with a human financial advisor, some of whom require $250,000 or more.

M1 Finance asks you to deposit $100 into your account to start building pies. The minimum goes up to $500 for IRAs.

Although Acorns has no minimum, it will start investing your money when you have at least $5 in your account.

💰 The winner: Acorns. You can start investing with only $5.

M1 Finance vs. Acorns: Management fees

Unlike full-service robo-advisors, M1 Finance doesn’t charge a management fee. M1 Finance makes money on lines of credit and optional extras like Plus memberships. (However, accounts with less than $20 and no trading activity for over 90 days are charged a $20 maintenance fee.)

M1 Finance Plus memberships cost $125 per year and offer access to perks like an extra trading window and discounted borrow rates. Plus accounts also let you set up Smart Transfers, a service that sweeps excess cash into your investing account. As a Plus member, you also earn interest and get cash back on your M1 Spend account.

Acorns has two membership plans that cost $3 or $5 a month. As of September 2021, Acorns Lite ($1/month) is no longer offered. The two plans offered today are:

  • Acorns Personal ($3/month), which includes personal investment, retirement and checking accounts plus a metal debit card
  • Acorns Family ($5/month), which includes all the Personal features plus Acorns Early, which offers investment accounts for kids

The fees are competitive for higher account balances. However, $3-$5/month may be expensive if you have very little invested. If you only have $1,000 in your account and sign up for Acorns Family, you are paying 6% each year. (You could argue that it’s still worth it because Acorns helps you save money you would have spent otherwise.)

💰 The winner: M1 Finance. M1 Finance doesn’t charge fees (unless you choose the Plus membership), though, to be fair, they are not a full-service robo-advisor that will create a balanced portfolio for you.

M1 Finance vs. Acorns: Socially responsible investing

Both M1 Finance and Acorns offer sustainable investing options. Broadly speaking, ESG portfolios score better on environmental, social, and governance metrics like carbon emissions, worker treatment, diversity and governance.

M1 Finance comes with two premade Responsible Investing Pies, though you can design your own. One Responsible Investing Pie invests in U.S. stocks, and the other one in global stocks. We have also created a very cheap fossil-free ESG investing pie. Read the full review of M1 Responsible Investing Pies.

Acorns sustainable / ESG portfolios invest in several ESG funds from iShares, a large ETF provider. Read the full review of the Acorns ESG Portfolio.

💰 The winner: Tie. M1 Finance lets you create custom portfolios, but their premade Responsible Investing Pies are not bad either. You get less flexibility with Acorns, but Acorns will take care of building the portfolio for you.

M1 Finance vs. Acorns: Automatic savings

Acorns lets you save more through automatic round-ups. When you buy something with your Acorns debit card or another linked card, Acorns rounds up your transaction to the nearest dollar and invests the change into your Invest account portfolio. According to Acorns, the average user invests over $30 a month through round-ups.

💰 The winner: Acorns. M1 Finance doesn’t offer round-ups.

M1 Finance vs. Acorns: Tax-loss harvesting

Tax-loss harvesting is a tax minimization strategy that involves selling funds or stocks at a loss to offset capital gains from investments that have made money.

Neither Acorns nor M1 Finance offers tax-loss harvesting.

💰 The winner: None. If you are interested in offsetting your taxable gains, you can get stock-level tax-loss harvesting from Personal Capital.

M1 Finance vs. Acorns: Human financial advisors

Neither Acorns nor M1 Finance offers human financial advisors, though both provide some educational resources.

💰 The winner: None. If you are looking for human advisors, you can get advisor access from Personal Capital.

M1 Finance vs. Acorns: Individual stocks and fractional shares

M1 Finance lets you add individual stocks and fractional shares to your pies.

Fractional shares allow you to buy a piece of a share if buying the entire thing is more than you would like to spend. For example, one share of Tesla (TSLA) stock costs $1,000, but if you only want to spend $100, you can buy 1/10 of that share. Buying fractions of shares limits how much cash is sitting in your account unspent.

Acorns doesn’t let you buy individual stocks or fractions of them.

💰 The winner: M1 Finance.

M1 Finance vs. Acorns: Margin lending

M1 Finance lets you borrow against the value of your investments.

M1 Finance gives margin loans to customers with over $5,000 in their investment account. The platform charges 3.5% interest (2% for M1 Plus members), and you can borrow up to 35% of the value of your account. Learn more about M1 Borrow.

💰 The winner: M1 Finance. Acorns doesn’t offer margin loans.

M1 Finance vs. Acorns: Rebalancing

Both M1 Finance and Acorns can rebalance your portfolio. Rebalancing means that the robo-advisors will buy or sell investments to get to your optimal asset allocation, like 80% stocks and 20% bonds. Sometimes when one asset class, like stocks, does much better than another one, like bonds, your portfolio may “drift” and become riskier (or less risky) than it should be. Rebalancing solves that.

💰 The winner: Tie. Nearly all robo-advisors now offer this feature.

💰 The Overall Winner

  • There is no clear winner: the two platforms are designed for different types of investors
  • Best for beginners: Acorns. Acorns Invest is a great option for beginners, especially those who are struggling to save. Acorns will create a custom portfolio for you to suit your needs like retirement goals and help you save by rounding up and investing your change
  • Best for self-directed investors: M1 Finance. M1 Finance gives you more choices if you know how you want to invest. There are no management fees. You can add individual stocks and fractional shares or even borrow against your investment portfolio

🔔 Want to compare more options? Check out the top 10 investing apps.


NOT INVESTMENT ADVICE. The content is for informational purposes only; you should not construe any such information as investment advice.

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