M1 Spend Review: High Yield Checking Account and Debit Card From M1 Finance

M1 Spend is a checking account that blends digital banking with automatic investment opportunities. Learn if you should get a checking account from M1 Finance.

Anna Yen   Updated April 1st, 2022

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Rating: Excellent (4.0 / 5)

M1 Spend Summary

  • Minimum account balance: $0
  • Monthly fees: none (optional M1 Plus memberships cost $125/year and are free in the first year)
  • APY: 1% (M1 Plus members only)
  • Cash back: 1% (M1 Plus members only)

Pros

  • Attractive 1% APY on your checking account balance (for M1 Plus members)
  • Debit card included (1% cash back on all purchases for M1 Plus members)
  • No minimum balance
  • No account maintenance fees
  • Links to your M1 Invest and M1 Borrow accounts
  • Early direct deposit
  • Send paper checks (M1 Plus members only)

Cons

  • Must be an M1 Plus member to earn interest and cash back
  • No mobile check deposit
  • No in-network ATMs
  • Only reimburses 1-4 ATM fees per month (4 for M1 Plus members)
  • No Smart Transfers with the free M1 Spend account

What is M1 Spend?

M1 Finance is an online broker that combines investing, borrowing, and banking in a unique, all-in-one experience. Known for their “pie investing” strategy and DIY approach, M1 offers features like:

  • Commission-free investing in over 6,000 stocks and ETFs, including fractional shares
  • Customized portfolios, including over 80 pre-made expert portfolios
  • Low-interest borrowing options
  • Automatic investment and rebalancing tools

M1 Spend aims to integrate banking and investing. Customers get a Visa debit card, electronic checks, a two-day early direct deposit, and seamless transfers between their M1 checking, investing, and borrow accounts. Members who upgrade to the paid M1 Plus account get extra features, too, such as a 1% APY on their checking balance and 1% cash back on purchases.

That said, M1 Spend doesn’t offer everything a traditional checking account would, such as a network of free ATMs or physical branches. And its best features – 1% APY and 1% cash back – are only for M1 Plus members. So we think M1 Spend is the best option if you also benefit from M1’s investing and borrow capabilities, which would justify signing up for M1 Plus.

🔔 Looking to learn more? Read the review of M1 Finance.

How does M1 Spend work?

M1 Spend is a checking account with FDIC insurance for up to $250,000. Like the rest of M1 Finance services, it comes with or without an M1 Plus subscription.

The basic option of M1 Spend is free, with no minimum balance or monthly fees. It comes with a Visa debit card, early direct deposit, and internal and external transfer abilities. However, basic M1 Spend users don’t earn interest and only get one ATM fee reimbursed per month. Besides, you can’t send paper checks and must pay 0.8%-1% international transaction fees if you spend abroad.

M1 Plus costs $125 per year (the first year is free). As an M1 Spend customer with an M1 Plus subscription, you get 1% cash back on all debit card purchases plus 1% interest on the money in your account. The 1% APY is attractive compared to a 0.05% (if not 0.01%) offered by a traditional bank account, many of which also come with monthly fees if you don’t meet minimum balance requirements.

With an M1 Plus Spend account, you also get four monthly ATM fee reimbursements, can send paper checks, and don’t need to pay international transaction fees.

M1 Plus has other premium features, including:

  • 2% margin loans through M1 Borrow, one of the lowest borrow rates we’ve seen
  • Custodial accounts for kids
  • An extra trade window
  • Smart Transfers

Smart Transfers

M1 Spend Plus comes with Smart Transfers. This feature lets you set rules to manage transfers between your checking, investing, and borrow accounts. For example, you can set a maximum cash balance for your Spend account. Any excess cash will automatically transfer into another M1 account of your choice.

You can either pay off your margin loan or invest more in the portfolios you’ve created. Or, you can designate a maximum balance for your Invest account and transfer extra cash to M1 Spend or M1 Borrow. As your investments make money, you can pay off your margin loan, for example.

Who can open an M1 Spend account?

Opening an M1 Spend account is easy, but you need an M1 Finance account first. To open an M1 account, you must be over 18 years old, a U.S. citizen or permanent resident, and have a government-issued I.D. You must also provide a valid phone number and U.S. address.

Once you’ve put at least $100 in your M1 Invest account or $500 to your M1 IRA, you’re eligible for M1 Spend.

You can get started in minutes via the web browser or by downloading the mobile app. After you’re set up, you can link to an existing bank account to make your first deposit. (Bear in mind that M1 is an online-only bank, so you won’t have access to in-person banking services.)

M1 Spend account minimum

M1 Spend requires no account minimums, period.

You can fund your account the day you sign up via direct deposit or by linking an external bank account. You can also move money from another broker or retirement account by clicking “Account Transfer.”

M1 Spend fees

M1 Spend Basic is technically free. There is no monthly fee. But, like with any financial institution, that doesn’t mean you won’t incur any fees.

For instance, international transactions come with fees ranging from 0.8%-1% of the total amount. Moreover, M1 Finance will only reimburse one ATM operator fee per month for basic users, though they themselves don’t charge ATM fees. 

Meanwhile, M1 Plus costs $125 per year but waives all international fees and up to four ATM operator fees per month. 

However, there is one fee that no M1 user can escape: outgoing wire transfer fees. If you need to initiate an outgoing wire transaction, you’ll have to cough up the $25 fee. Other financial institutions also charge wire transfer fees. (But don’t worry: incoming wire transfers are free!) 

Is M1 Spend safe?

M1 Spend is as safe as any other banking account – despite M1 Finance not being a bank. M1 Spend has partnered with Lincoln Savings Bank, Member FDIC, so that every M1 Spend user gets up to $250,000 in FDIC coverage.

M1 Spend customer complaints

M1 Spend is a solid checking option – but it’s not perfect. To start, many users criticize the annual fee as their primary reason for sticking with the less-flexible basic option or another high-APY alternative. So M1 Spend makes the most sense if you use M1 Finance to invest and borrow and can benefit from an M1 Plus membership.

Other common complaints include:

  • No joint M1 Spend accounts (joint Invest accounts are supported)
  • No mobile check deposits

That said, M1 Finance does appear to listen to its customers. For example, as of December 2021, M1 announced that its debit cards are now mobile wallet-compatible, addressing one of its biggest complaints. Additionally, it now offers wire transfers.

💰 Is M1 Spend worth it?

M1 Spend is a viable banking option that boasts competitive rates and a nearly full-service checking account. Since it’s so closely integrated with M1’s Invest and Borrow options, it’s ideal if you want to bank where you invest, or vice versa.

That said, M1 Spend is best if you use M1 Finance to borrow and invest, and so can benefit from other M1 Plus features like 2% borrow rates. Although M1 Plus is free in year one, after that, you have to pay $125 annually. If you don’t use any other features and get M1 Spend as a standalone service, that fee is high. But if you don’t sign up for M1 Plus, the basic account has a 0% APY and no check-writing abilities.

In conclusion, M1 Spend is a good banking option with a high APY, but only if you use M1 Finance to borrow and invest and can benefit from an M1 Plus membership.

🔔 Looking to learn more? Read the review of M1 Finance.

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

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Frequently Asked Questions

Does M1 Spend cost money?

The basic version of M1 Spend is free and has no minimum balance. The premium version that comes with M1 Plus offers a 1% APY and 1% cash back. M1 Plus costs $125/year, though M1 Finance offers the first year for free.

Does M1 have checking accounts?

Yes, M1 Finance offers checking accounts (M1 Spend) that come with a Visa debit card. Signing up for M1 Spend is free.