M1 Finance vs Acorns 2022 -What is the verdict?

In today’s society, making smart investment choices is a good idea. After all, a suitable investment can lead to a nice sized profit in the future!

But with so many investing platforms on the market today, how do you choose the right one? How do you select the investment platform that will give you the most bang for your buck?

In today’s article, we will compare M1 Finance to Acorns and let you know which is better. We will declare a winner and hope this information helps you make the best-informed decision possible.

M1 Finance vs. Acorns – Which Has Better/More Account Types?

One of the more critical factors to consider when choosing an investment platform is the type of accounts they have. After all, you want to select the account that works best for you and your needs!

M1 Finance offers many types of accounts, such as joint accounts, taxable accounts, trust accounts, custodial accounts (for M1 Plus members), retirement accounts, Traditional IRA, Roth IRA, Rollover IRA, and SEP IRA accounts.

Acorns also offer these types of accounts, but their IRA accounts are available with a mid-grad “Plus” plan. Choosing that plan will cost you $2 a month, but we will cover their fees more in the next section. Acorns also offer UTMA and UGMA accounts.

Both platforms offer FDIC-insured bank/checking accounts with a debit card. The m1 checking account can earn interest and cash back, but only if you are an “M1 Plus” member, which costs $125 a year. Acorns’ cash program is called Found Money®, and you only receive money back when you shop at their partner stores.

Neither platform offers Non-profit 401(k), Solo 401(k), SIMPLE IRA, HSA, or 529 accounts.

Since both platforms offer the same type of accounts, this category ends in a draw. 

M1 Finance vs. Acorns – Which Has Lower Fees?

If no fees are a selling point for you, then M1 Finance is your best option. M1 Finance does not charge their customers account fees or maintenance fees. However, they are not entirely fee-free. If your account is $20 or less and has been inactive for 90 or more days, you will be charged a $20 inactivity fee. They also charge some miscellaneous fees for paper statements; outgoing account transfers, to name two.

On the other hand, Acorns charges a monthly fee to use their services. As we mentioned above, they have different tiered accounts, and the fees you pay will depend on your account type.

For their basic plan, you pay $1 a month. For their plus account, you pay $2 a month. For their premium account, you pay $3 a month. However, they do not charge you a fee for account inactivity or account maintenance, but you will still be responsible for paying the monthly fee even when you are inactive. 

Though the fees from Acorn are not high, why pay the extra money if you do not have to? Overall, we give this category to M1 Finance.

M1 Finance vs. Acorns – Which Has Better Customer Service?

The winner of this heading will not be winning by much. Both platforms could use some improvement in the customer service department.

M1 Finance is a bit easier to get in contact with should an issue occur. They have a FAQ section and a chat feature. You can also shoot them a call or send them an email if that is your preferred method. They reply almost instantaneously when you call, or at the most within a few hours to a day after you send them an email. 

Acorns can also be contacted through a phone call or email. Their response time is about the same as M1’s. What knocks them down a few pegs is that their representatives have a broad and basic understanding of the issues you might face.

However, this means that if you have a specialized or time-urgent issue, getting a helpful response will take longer. And if your problem is time-urgent, this could cause potential issues for you that will only exacerbate the situation.

Overall, both platforms are praised for having excellent customer service. But M1 finance wins this category by a small margin because Acorns is not always able to swiftly fix time-urgent matters. 

M1 Finance vs. Acorns – Which Has Better Features?

We ask you, the reader, to determine who wins this category as this category is based on what you, the customer, value most.

Acorns have this feature that is great for those who are not as financially responsible as we should be. Acorns round up your everyday purchases and put that money into investments. 

This feature is an excellent way to save up cash that you would have otherwise spent.

As we will call it, this “sneaky savings” feature is, in our opinion, the only redeeming feature Acorns offers its customers. Acorns does not offer its investors the ability to invest in individual stocks, asset classes, many ETFs and funds, and asset classes. M1 Finance allows its investors the ability to invest in all of those.

Acorns also does not let you research stocks in greater detail, borrow money against your portfolio with low-interest rates, rebalance a diversified portfolio, or withdraw cash to your tax advantage. M1 Finance allows all of this and enables you to share your Custom Pie investment charts on social media.

Both platforms offer support dividend reinvestments. When your investments pay dividends, you can reinvest that money instead of an unused cash balance. 

Both platforms also offer fractional shares, meaning you can purchase a fraction of one investment. By purchasing this small share, you can watch small amounts of money grow large. Both also offer automatic rebalancing, which helps keep your portfolio’s holdings on track and continue to meet your investment goals.

As we mentioned above, we will leave it to you, the reader, to decide who wins this category as this one is purely based on what you value and need more.

The Pros & Cons of Both

No company is 100% perfect. Both M1 Finances and Acorns have some excellent pros to them but also some significant cons to them. 

So let us weigh some of the other pros and cons of both platforms:

The Pros of M1 Finance

  • Completely free-to-use platform
  • Easy to use 
  • Excellent user interface
  • $100 minimum to get started ($500 for retirement accounts)
  • Choose your own investments
  • Fully customizable portfolios of stocks and ETFs
  • Has active or passive investment options available
  • Excellent for beginning investors

The Cons of M1 Finance

  • You can only trade once a day (unless you are an M1 Plus member)
  • No human advisors (only bots)
  • No full-scale tax-loss harvesting
  • Narrow investment options 

The Pros of Acorns

  • Great for money savers
  • Easy to invest with
  • No trading fees
  • No minimum amount needed to invest

The Cons of Acorns

  • No full-scale tax-loss harvesting
  • Narrow investment options 
  • No value in upper membership tiers
  • Only five portfolio types are available
  • Unable to purchase individual stocks or ETFs

And The Winner Is…

So if you have not already guessed it, M1 Finance is the winner of this versus article! Overall, we feel M1 Finance is the better option for beginning investors and investors in general.