Charles Schwab vs M1 Finance
Last updated July 2026
Charles Schwab
Full-service brokerage with the best trading platform (thinkorswim)
Advantages
- $0 commissions on stocks, ETFs, and options
- thinkorswim platform is the best free trading platform for active traders
- Schwab Investor Checking has no fees and unlimited ATM reimbursement worldwide
- Deep research, screeners, and retirement tools
- Access to futures and forex trading
Drawbacks
- Default cash sweep pays only 0.45%, must manually buy money-market funds for yield
- Schwab's own index funds don't quite match Fidelity ZERO's 0% fees
M1 Finance
Custom pie-based investing with no advisory fee
Advantages
- No advisory fee on M1 Invest, pay $0/yr on any balance
- Custom Pies let you build fully personalized portfolios with automatic rebalancing
- Fractional shares included
- M1 Borrow: margin at 6.75% on M1 Plus (competitive rates)
- High-yield checking (M1 High-Yield Cash Account paying 5.00% APY as of mid-2026)
Drawbacks
- No tax-loss harvesting (a real gap for taxable accounts)
- Only one trading window per day on the free plan
- M1 Plus is now $3/mo, previously free
- No human advisor access
Charles Schwab and M1 Finance both play in investing platforms, but they're aimed at different buyers. Charles Schwab is built for active traders and travelers who value thinkorswim and global ATM rebates. M1 Finance is built for dIY investors who want to design their own portfolio with automatic rebalancing. Which one fits depends on which of those descriptions sounds more like you.
Feature Comparison
| Feature | Charles Schwab | M1 Finance |
|---|---|---|
| Advisory Fee | -- | $0 |
| Minimum Investment | -- | $100 for taxable, $500 for retirement |
| Rebalancing | -- | Automatic based on your custom pie targets |
| Tax-Loss Harvesting | -- | No |
| Borrowing/Margin | -- | M1 Borrow at 6.75% (M1 Plus) |
| Portfolio Customization | -- | High, fully custom pies |
| Human Advisor | -- | No |
| Cash Account APY | -- | 5.00% APY (M1 High-Yield Cash Account) |
| Trading Commissions | $0 stocks, ETFs, options | -- |
| Options Contract Fee | $0.65 per contract | -- |
| Cash Sweep Yield | 0.45% default; must manually buy SWVXX or SNSXX for yield | -- |
| Mutual Funds | 4,000+ NTF; broad Schwab index fund lineup | -- |
| Futures Trading | Yes | -- |
| Research & Analysis | Deep, Schwab-produced plus third-party | -- |
| International Trading | Yes, 12 countries directly | -- |
| Cash Management | Schwab Investor Checking with global ATM rebate | -- |
Charles Schwab Wins
Charles Schwab takes it overall (9/10 vs 8/10), but M1 Finance is still the sharper pick for dIY investors who want to design their own portfolio with automatic rebalancing.
Charles Schwab's standout strength: $0 commissions on stocks, ETFs, and options. Its biggest drawback (default cash sweep pays only 0.45%, must manually buy money-market funds for yield) is easier to live with than M1 Finance's (no tax-loss harvesting (a real gap for taxable accounts)). M1 Finance isn't out of the running though — its own standout strength is no advisory fee on M1 Invest, pay $0/yr on any balance. If you fit the profile of dIY investors who want to design their own portfolio with automatic rebalancing, that alone can flip the decision.
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