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M1 High-Yield Cash Account Review: A High-Yield Option Ideal for M1 Finance Users

Review Updated
Matt Frankel, CFP®
Author: Matt Frankel, CFP®
Matt Frankel, CFP®
Matt Frankel, CFP®
Writer, Analyst

Matt is a Certified Financial Planner™ and investment advisor based in Columbia, South Carolina. He writes personal finance and investment advice for Motley Fool Money and its parent company The Motley Fool, with more than 4,500 published articles and a 2017 SABEW Best in Business award. Matt writes a weekly investment column for the Motley Fool ("Ask a Fool") that is syndicated in USA Today, and his work with Motley Fool Money has also been syndicated to MSN and Yahoo! Finance. He has been regularly featured on Fox Business and many other major outlets. He’s a graduate of the University of South Carolina and Nova Southeastern University, and holds a graduate certificate in financial planning from Florida State University.

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Steven Porrello
Reviewer: Steven Porrello
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Steven is a personal finance writer covering topics from mortgages to credit cards to market news. He has written for The Motley Fool Canada, Ramsey Solutions, Nerdwallet, Clever Real Estate, and other major outlets. Steven launched his writing career at the age of four with his first book, "Revenge of the Bad Guys." He currently lives in Portland, Oregon.

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Fact Checked: Nathan Alderman
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Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures that our product ratings are not influenced by compensation. Terms may apply to offers listed on this page. APY = Annual Percentage Yield. APYs are subject to change at any time without notice.

The M1 High-Yield Cash Account might be for you if: You have at least $10,000 in total assets or an M1 personal loan and want to maximize your earnings in a high-yield cash account.

Although interest rates have risen considerably in recent years, many branch-based banks still pay minuscule yields on savings accounts, so it can be worth it to look outside the traditional banking industry.

  • Our team of experts assessed 100+ banking institutions
  • We evaluate all banking institutions across the same 4 key criteria: annual percentage yield (APY), brand reputation, fees and minimum requirements, and additional perks
  • Our bank ratings are never influenced by our advertising partners
  • We strictly feature products that offer federal insurance and high customer satisfaction, keeping our recommendations unbiased
Ratings Methodology
Rates as of Dec 20, 2024

M1 High-Yield Cash Account

Member FDIC.
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.50 out of 5 stars.
4.50/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
APY
4.00%
Min. To Earn APY
$0.01
  • Highly competitive APY
  • $3.75 million FDIC insurance limit
  • No minimum balance

  • Monthly platform fee for balances below $10,000
  • Must open a taxable brokerage account to have a cash account
  • No check-writing privileges or debit card access

The M1 High-Yield Cash Account has an excellent APY, but is best suited for customers who take advantage of the company's other product offerings as well.

M1 High-Yield Cash Account(s) is an investment product offered by M1 Finance, LLC, an SEC registered broker-dealer, Member FINRA / SIPC. M1 is not a bank and M1 High-Yield Cash Accounts are not a checking or savings account. The purpose of this account is to invest in securities, and an open M1 Investment account is required to participate in the M1 High-Yield Cash Account. All investing involves risk, including the risk of losing the money you invest.

Compare savings rates

Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.

Account APY Promotion Next Steps
3.80%
Rate info Circle with letter I in it. 3.80% annual percentage yield as of December 28, 2024. Terms apply.
Min. to earn: $0
N/A
Open Account for American Express® High Yield Savings

On American Express's Secure Website.

up to 4.00%²
Rate info Circle with letter I in it. You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.
Min. to earn: $0
New customers can earn up to a $300 bonus with qualifying direct deposits!¹
3.80%
Rate info Circle with letter I in it. See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.
Min. to earn: $0
N/A

Full M1 High-Yield Cash Account review

Like most financial products, the M1 High-Yield Cash Account isn't a great fit for everyone. Here's a rundown of the perks and potential drawbacks you should know about before deciding if it's right for you.

M1 High-Yield Cash Account interest rate

Account APY Minimum Deposit
M1 High-Yield Cash Account 4.00% $0.01
Data source: M1.

Fees

Like online banks, M1 doesn't charge monthly service fees for its high-yield savings account. However, it does have ancillary fees you should know about.

Monthly service fee $0
Wire transfer fee $25 (outgoing)
Overdraft fees n/a
Paper statements $5
Data source: M1.

M1 charges a $3 monthly platform fee to clients who have less than $10,000 in total assets or without an active personal loan. There's a 90-day grace period before M1 starts charging the fee, making it easier for clients who might want to test-drive the platform to do so without depositing $10,000 right away.

Assets held with M1 Finance can include savings and investments. If you plan to hold less than $10,000 in total assets with M1 and you don't have a personal loan, you might be better off with a free high-yield savings account.

Minimum balance

The M1 High-Yield Cash Account requires a $100 minimum deposit to earn its APY.

Withdrawal limit

Transfers to and from external accounts have a $120,000 daily limit.

Mobile app

The M1 banking app provides all the features you need to bank through your handhelds. You can schedule transfers, get real-time alerts on suspicious activity, view accounts, and more. The app has a rating of 4.7 out of 5 stars on the Apple App Store and 4.3 out of 5 stars on Google Play.

How to access your money

M1 Finance doesn't have physical branches, nor does it have an ATM network available to customers. In fact, it's important to mention that M1 Finance isn't a bank at all -- the M1 High-Yield Cash Account isn't even a bank account. Rather, it' is an extension of your brokerage account, with the purpose of earning interest from your uninvested cash balance.

You can access your money using the same general procedure for moving money into and out of your brokerage account.

Deposit options

The primary way to deposit money into the M1 High-Yield Cash Account is by electronic funds transfer from a linked bank account. The only other way to deposit money is through a wire transfer to the account via a partner bank, the details of which are on M1's website. There is no way to deposit cash or checks into the account.

Withdrawal options

The only ways to withdraw money from the M1 High-Yield Cash Account are by electronic funds transfer to a linked bank account or wire transfer. M1 no longer offers its checking account product, so for practical purposes, you'll need to maintain a checking account at another institution.

The account also offers M1 "Smart Transfers," which automatically allow you to transfer money between M1 accounts to maintain a desired balance.

Online user reviews

Reviews of the M1 High-Yield Cash Account are scant. Some users were upset when M1 opened an investment account after they applied for a high-yield savings account. The issuer in general has a 2 out of 5 stars on Trustpilot and no review rating on BBB.

Top perks

Competitive APY: The M1 High-Yield Cash Account pays an APY of 4.00% right now, which is on the high end of the best high-yield savings accounts we follow.

Up to $3.75 million is FDIC insured: High-balance savers are often worried about the FDIC's $250,000 insurance cap. Like several tech-focused online financial companies, M1 is offering significantly more -- as much as $3.75 million in FDIC-insured deposits.

While M1 isn't a bank and the M1 High-Yield Cash Account isn't a bank account, the money in the account is swept out to partner banks, and then becomes eligible for FDIC insurance coverage.

This effectively takes advantage of FDIC insurance from several banks to ensure depositors' money is completely safe, up to $3.75 million in cash balances. Prior to that sweep, your deposits are protected by SIPC, the Securities Investor Protection Corporation, just like other brokerage account assets.

M1 Finance ecosystem: M1 Finance is primarily an investment account provider, and it has an excellent brokerage platform that offers individual and joint brokerage accounts, retirement accounts, and more. It also offers a credit card product, portfolio lines of credit, personal loans, and other financial tools. The M1 ecosystem is designed to let people invest, borrow, and save in one place.

What could be improved

No checks or debit cards: While it isn't common to be able to write checks out of a savings account, it isn't unheard of to be able to access savings account money through an ATM with a debit card. Since it's a brokerage account and not a bank account, the only way to withdraw money from the M1 High-Yield Cash Account is by transferring funds to an external, linked bank account.

No cash or check deposits: There's no way to deposit cash or checks into the M1 High-Yield Cash Account without depositing them into another linked bank account first. There are no branches or ATMs available for use, and there' is no mobile check deposit feature at this time. The only way to deposit money into the account is through electronic funds transfer from a linked external bank account.

Requires a brokerage account: You must open an M1 taxable brokerage account in order to establish a M1 High-Yield Cash Account. Technically speaking, the cash account isn't a bank account; it's an investment account that's an extension of a brokerage account.

Is M1 High-Yield Cash Account FDIC insured?

Yes, M1 has FDIC insurance through a series of partner banks, up to $3.75 million. Until funds are swept into those banks (which doesn't take more than one or two business days), M1 protects them through the SIPC.

The M1 High-Yield Cash Account is right for you if:

The M1 High-Yield Cash Account could be a great fit for you if you have a significant amount of money in savings and want to receive a high APY in the same place you buy, hold, and sell investments. It could be an ideal fit for people who use M1 Finance for other aspects of their financial lives, such as investing, credit cards, and personal loans.

Keep reading about M1 Finance:

Our savings account methodology

At Motley Fool Money, we rate savings accounts on a five-star scale (1 = poor, 5 = best). We evaluate all savings accounts across four main criteria: annual percentage yield (APY), brand and reputation, fees and minimum requirements, and perks that really make a difference -- think ATM access, linked checking accounts, or even branch access.

Our scores are weighted as:

  • APY: 50%
  • Brand and reputation: 20%
  • Fees and minimums: 15%
  • Other perks: 15%

Learn more about how Motley Fool Money rates bank accounts.

FAQs

  • You can apply for the M1 High-Yield Cash Account through M1's website or app. However, keep in mind that you must have an active M1 investment account to open a cash account. If you don't already have one, M1 will walk you through the process of opening one at the same time.

  • M1 Finance is not a bank. However, it partners with banks for a cash sweep feature, which enables it to offer FDIC protection to savers.

  • The M1 High-Yield Cash Account isn't a stand-alone account and is considered an investment account that is an extension of a brokerage account. So, to open a M1 High-Yield Cash Account, you need to have a taxable (non-retirement) brokerage account with M1.