M1 Finance vs. Vanguard: Online Broker Pros & Cons

M1 Finance and Vanguard let you buy and sell stocks without a commission. M1 Finance targets investors who want to build investment portfolios, borrow at low rates, and earn interest on uninvested cash. Vanguard is best known for pioneering low-cost mutual funds. Keep reading to learn which broker is the best option for you.

SustainFi   Updated January 20th, 2022

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At a glance

  • Both M1 Finance and Vanguard let you buy and sell stocks and ETFs for free
  • Best for self-directed investors: M1 Finance. M1 Finance lets you easily create custom portfolios, buy fractional shares and borrow against your investment account. It’s easy to rebalance your portfolio to meet your investing goals. A one-stop-shop, M1 Finance also offers bank accounts and a stock rewards credit card
  • Best for mutual fund investors: Vanguard. Vanguard has pioneered low-cost mutual fund investing, but it has not kept up with the times otherwise. Its user interface looks dated and clunky, and Vanguard still doesn’t support fractional shares

Keep reading to learn more.






$0 for stock and ETF trades


$0 for stock and ETF trades


6,000+ stocks, ETFs, fractional shares

80+ expert portfolios


Stocks, ETFs, options, mutual funds, bonds, CDs

Fractional shares


Fractional shares


Margin loans

Yes (2.0%-3.50%)

Margin loans

Yes (4.75%-8.50%)

Account types

Individual and joint investment accounts; Traditional, Roth, SEP IRAs; custodial accounts; trusts

Account types

Individual and joint investment accounts; Traditional, Roth, SEP IRAs; custodial and 529 accounts; trusts


Savings accounts with up to 1% APY


Not offered

Socially responsible investing


Socially responsible investing


What is M1 Finance?

M1 Finance is an investment platform that combines an online broker and a robo-advisor. They offer an easy-to-use app that lets you build customizable portfolios (called β€œpies.”)

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. 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 eligible M1 Plus members.)

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.

πŸ”” Read the full review of M1 Finance.

What is Vanguard?

Founded in 1975, Vanguard is one of the largest fund managers in the world. Its founder, John Bogle, pioneered low-cost, diversified index fund investing. Today, Vanguard has over $8 trillion in assets under management, supports more than 30 million investors, and offers 417 funds. 

Vanguard is best known for its low-cost mutual funds, but it offers a range of services, including:

  • Branded index funds and ETFs
  • An online broker
  • Vanguard Digital Advisor, a robo-advisor
  • Human financial advisors

Vanguard’s ownership structure is also unique. Vanguard is owned by its mutual funds, which are owned by shareholders. This way, investors’ and Vanguard’s interests are aligned, and profits are passed on to investors as lower fees.

M1 Finance vs. Vanguard: Account types

Both M1 Finance and Vanguard support:

  • Individual and joint taxable investment accounts
  • Retirement accounts, including traditional, Roth, SEP, and rollover IRAs
  • Trusts
  • Custodial (UTMA/UGMA) accounts for kids (available to M1 Plus members only)

Vanguard also supports 529 college savings accounts.

πŸ’° The winner: Vanguard.

M1 Finance vs. Vanguard: Minimum investment

M1 Finance asks you to deposit $100 into your account to start building pies. The minimum goes up to $500 for IRAs and $5,000 for trusts.

Vanguard has no minimum account size to start investing, though most Vanguard mutual funds require a $3,000 minimum investment. Also, Vanguard doesn’t support fractional shares, so you need to have enough money in your account to buy at least a share of whatever you want to buy.

πŸ’° The winner: Vanguard.

M1 Finance vs. Vanguard: Commissions and fees

Both M1 Finance and Vanguard offer free trading in stocks and ETFs.

Although M1 Finance lets you build portfolios, they don’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.

Vanguard charges brokerage account maintenance fees of $20 / year if you have less than $10,000 invested. However, you can avoid these fees by signing up for e-delivery.

πŸ’° The winner: Tie.

M1 Finance vs. Vanguard: User interface

M1 Finance offers an intuitive user interface that helps you visualize your investment as “pies.” However, the platform doesn’t offer research tools, so you will have to research your investments elsewhere.

Vanguard’s interface looks quite dated and hard to navigate, though you can still see the essentials like your position sizes, account balance, and performance.

πŸ’° The winner: M1 Finance.

M1 Finance vs. Vanguard: Available investments

Both brokers let you buy and sell stocks and ETFs.

M1 Finance lets you add over 6,000 individual stocks, ETFs, 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.) In addition, you can pick from over 80 expert portfolios.

Although Vanguard doesn’t support fractional shares, it has more available investments, such as:

  • Mutual funds, including over 3,000 funds with no transaction fees
  • Options (preapproval required)
  • Certificates of deposits and bonds
  • Money market funds

πŸ’° The winner: Vanguard has more investment types, although M1 Finance is the only one offering fractional shares. Neither broker offers cryptos. If you want to trade them, check out SoFi or Public.

M1 Finance vs. Vanguard: Margin loans

Margin loans let you borrow against your investments. You can use margin to increase your trading power.

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.

To borrow from Vanguard, you need to get prior approval, and rates are much higher than what M1 Finance offers.

Margin loanInterest rate
$250,000-$499,999 6.50%
> $1 million4.75%

πŸ’° The winner: M1 Finance. The rates are much more attractive, even if you are not an M1 Plus member.

M1 Finance vs. Vanguard: Robo-advisor

Robo-advisors create and manage a balanced portfolio for you.

Out of the two brokers, only Vanguard offers a full-fledged robo-advisor. However, you can argue that M1’s custom portfolios are more attractive. You can achieve the same goals without paying a management fee, even though building or picking the right portfolio will require some research.

Vanguard’s Digital Advisor is a robo-advisor that invests in low-cost Vanguard ETFs. Digital Advisor will pick and rebalance funds for you based on your goals and risk tolerance. Digital Advisor requires a $3,000 minimum investment and charges 0.20% of your assets each year. Unlike other popular robo-advisors, Vanguard doesn’t offer a choice of portfolios, and the minimum is high.

πŸ’° The winner: Tie.

M1 Finance vs. Vanguard: Trading hours

Built for long-term investors, M1 Finance offers 1-2 daily trading windows. M1 Finance has trading windows to lower trading costs and keep trading free. The morning window begins at 9.30 AM, and the afternoon trading window begins at 3 PM. The morning window is available to all M1 Finance customers, while the afternoon window is only for M1 Plus members. To participate in both windows, M1 Plus members must have $25,000 or more in equity per account.

With Vanguard, you can place orders when the markets are open, that is, between 9.30 AM and 4 PM EST, and after hours, between 4 PM and 5.30 PM.

πŸ’° The winner: Vanguard.

M1 Finance vs. Vanguard: Banking

Vanguard doesn’t offer bank accounts, though they put your uninvested cash in a money market fund. In practice, money market funds currently pay 0% interest, so it’s not a huge benefit.

In contrast, M1 Finance has M1 Spend, 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. Learn more about M1 Spend.

πŸ’° The winner: M1 Finance.

M1 Finance vs. Vanguard: Human financial advisors

M1 Finance doesn’t offer human advisors, but Vanguard provides Personal Advisor Services, for a fee. They require $50,000 to enroll and you will pay 0.30% of your account balance each year. In return, you get:

  • Fiduciary advisor access
  • A personalized financial plan
  • Investment coaching

If you have over $500,000 to invest, you get access to a dedicated advisor.

πŸ’° The winner: Vanguard.

M1 Finance vs. Vanguard: Socially responsible investing

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.

Vanguard offers a selection of socially responsible funds, such as the FTSE Social Index Fund (VFTAX). Check out this review of Vanguard’s socially responsible funds to learn more.

πŸ’° The winner: Tie.

πŸ’° The Overall Winner

  • Best for long-term, passive investors: M1 Finance. M1 Finance lets you build custom portfolios or pick from a selection of over 80 expert pies and rebalance them. It lets you earn interest on uninvested cash and get a margin loan at very attractive rates
  • Best for retirement investors: Vanguard. With its wide selection of low-cost mutual funds and tons of retirement advice, Vanguard targets older clients who are saving for retirement. Although we like its mutual fund selection, Vanguard’s downsides include a clunky and dated interface, high borrow rates, and no banking options

πŸ”” 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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