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Is M1 Finance FDIC Insured?

Minho Investment Association| Updated: August 29, 2023

M1 Finance has emerged as a prominent player in the realm of financial technology, offering users a unique blend of investment and banking services. One of the critical aspects investors consider while entrusting their funds to a financial institution is the security of their deposits. The Federal Deposit Insurance Corporation (FDIC) plays a pivotal role in ensuring the safety of deposits in traditional banks. 

Is M1 Finance FDIC insured? M1 Finance’s accounts are not FDIC-insured. However, there is a banking product, M1 Spend, that offers the security of FDIC insurance. This means that funds held in M1 Finance investment accounts are not protected by FDIC insurance in the same way that funds held in traditional bank accounts are protected.

This article navigates the intricate terrain of M1 Finance’s connection with FDIC insurance.

M1 Finance and FDIC Insurance

Distinguishing between FDIC-insured bank accounts and M1 Finance’s diverse investment products is crucial. While FDIC coverage shields uninvested cash in traditional banks, investments like stocks, ETFs, bonds, and mutual funds are under the SIPC1 protection.

M1 Finance doesn’t function as a traditional bank, and therefore FDIC insurance doesn’t extend to its services. However, M1 Finance has implemented vital protective measures. The Securities Investor Protection Corporation (SIPC) plays a central role, offering coverage of up to $500,000 for securities and cash combined in each account type, with a maximum of $250,000 allocated to cash holdings.

M1 Finance’s cash management account

M1 Finance’s cash management account, known as M1 Spend, represents a bridge between traditional banking functionalities and modern financial management and offers the security of FDIC insurance. This account allows direct deposits of paychecks, facilitates bank transfers, and introduces the convenience of a linked Visa debit card. Notably, unutilised cash can be directed to your M1 Invest account, fostering effortless investment strategies.

Should you choose to upgrade to the M1 Plus subscription, an additional world of benefits unfolds. With a remarkable 5% APY interest rate, this surpasses prevailing rates across most checking accounts nationwide. Moreover, the M1 Plus subscription extends a debit card offering 2.5 to 10% cash back on numerous purchases within the “Owner’s Rewards Program” and 1.5% on everything else.

Understanding M1 Finance: A Closer Look

Central to M1 Finance’s appeal is its versatile account options designed to accommodate a spectrum of investor preferences. From customizable brokerage accounts to managed investment portfolios and specialised savings accounts, M1 Finance empowers investors to translate their financial ambitions into actionable strategies.

Nestled within the M1 Finance platform lies an extensive selection of investment opportunities encompassing stocks, bonds, mutual funds, ETFs, and more. This diverse array equips investors with the tools to craft portfolios aligned with their risk tolerance and financial goals, fostering a truly personalised investment journey.

M1 Finance’s intuitive platform streamlines portfolio management, research, and trading. The platform’s commitment to investor education shines through resources, webinars, and dedicated customer support, empowering users to make well-informed financial choices.

Understanding FDIC Insurance

The Federal Deposit Insurance Corporation (FDIC) insurance stands as a cornerstone of financial security for depositors in the United States. This protection offers peace of mind by safeguarding your funds against potential bank failures.

In essence, FDIC insurance is a safety net for your deposits, covering a wide range of accounts, including savings, checking, and certificates of deposit (CDs).

The assurance extends up to $250,000 per depositor per bank, ensuring that a significant portion of your funds remains safeguarded even in the face of unexpected challenges.

It’s important to note that FDIC insurance applies exclusively to traditional banking products, not investments like stocks, bonds, mutual funds, or other securities. The coverage primarily pertains to cash deposits, ensuring that even if a bank faces financial difficulties, your hard-earned money is shielded up to the specified limit.

FDIC deposit insurance covers: FDIC deposit insurance does not cover:
Checking accounts Stock investments
Negotiable Order of Withdrawal (NOW) accounts Bond investments
Savings accounts Mutual funds
Money Market Deposit Accounts (MMDAs) Life insurance policies
Certificates of Deposit (CDs) Annuities
Cashier’s checks Municipal securities
Money orders Safe deposit boxes or their contents
Other official items issued by an insured bank U.S. Treasury bills, bonds, or notes
Crypto assets


In conclusion, M1 Finance is more than a financial platform; it’s a partner in your journey towards financial empowerment. While M1 Finance’s investment accounts may not be FDIC insured, the M1 Spend account shines as an exception, offering the protective coverage of FDIC insurance. 

As you chart your financial course, M1 Finance stands as a steadfast partner, offering a balance between accessibility and protection within the dynamic landscape of modern finance.

1SIPC (Securities Investor Protection Corporation) coverage safeguards funds invested in securities, such as stocks and bonds, in case of broker insolvency. While the Fidelity Cash Management Account’s Money Market Overflow isn’t FDIC insured, it may still be eligible for protection under SIPC rules.

Minho Investment Association

The Minho Investment Association (MIA) is a junior initiative from the University of Minho (Portugal), which aims to promote financial literacy among young people.