M1 High-Yield Cash accounts are an investment product offered by M1. The purpose of this secondary brokerage account (the “Cash Account”) is to earn interest on uninvested funds held in an account while you determine your longer-term investing strategy.
A Cash Account is only available to existing clients of M1 who maintain an open primary investment account.
How SIPC Insurance protects your funds
M1 is a member of the Securities Investor Protection Corporation (SIPC), which provides protection for your securities and funds within your Primary Invest Account, or funds held in your Cash Account, including Brokerage-Held Cash (and not yet swept to a Participating Bank), up to applicable SIPC limits.
SIPC protects against the loss of customer securities and cash awaiting investment in securities up to a total of $500,000 (of which up to $250,000 may be cash) per customer in each separate capacity under SIPC rules.
For additional information, please see Separate Capacity SIPC Insurance.
How FDIC Insurance protects your funds
The Federal Deposit Insurance Corporation (FDIC) insures bank deposits up to $250,000 per depositor, per bank, and per account ownership category. This insurance protects your funds in the unlikely event a member bank fails.
For additional information, please FDIC: Understanding Deposit Insurance.
How M1 offers coverage beyond $250,000
If you have more than $250,000 in your M1 High-Yield Cash account, M1 uses a network of partner banks to spread your funds across multiple institutions. This expands your FDIC insurance coverage—up to $4.75 million per depositor.
Because FDIC insurance is based on the depositor, institution, and account type, moving funds to network institutions provides enhanced FDIC coverage, provided you do not also have deposits at those same network banks elsewhere.
The FDIC insurance limit applies to your total deposits held at each network bank, including both M1 and any other accounts you may own at that institution.
Note: Even with this structure, all funds are available to customers on demand, and there is no interruption to funds access.
Reviewing the list of network banks
You should review the current list of network banks regularly.
If you already have accounts at any of these participating banks, consider your combined deposits to ensure you do not exceed the $250,000 insurance limit per bank.
You may consider reducing your balance at the listed participating institutions to ensure complete insurance coverage.
Frequently asked questions (FAQ)
When does FDIC insurance begin?
The cash balance in your Cash Account is eligible for FDIC insurance when it is swept to our partner banks and out of your brokerage account. Unless the cash balance is swept to partner banks, they are no longer held in your brokerage account and are not protected by SIPC insurance.
FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program.
Does swept cash accrue the same interest rate as Brokerage-Held Cash?
All eligible funds within your Cash Account and part of the Cash Sweep Program accrue the same interest rate, whether held at M1 as Brokerage-Held Cash, insured by the Securities Investor Protection Corporation (SIPC), or swept into your Deposit Account and insured by the Federal Deposit Insurance Corporation (FDIC) at one or more participating banks.
Can I withdraw swept cash directly from a participating bank?
You will only have access to your Program Deposits through your Cash Account held at M1. You cannot make deposits or withdrawals directly from the Deposit Account at Participating Banks, even if you contact the Participating Bank.
Can I opt out of participating in Brokerage-Held Cash?
You may opt-out of your participation in Brokerage-Held Cash at anytime by contacting us at [email protected]. Please include “Brokerage-Held Cash Opt-Out” in the subject line, and include your full name, Primary Invest Account number, and your request to opt-out.
M1 reserves the right to request additional identifying information.
M1 is not a bank. M1 Spend is a wholly-owned operating subsidiary of M1 Holdings Inc. M1 High-Yield Savings Accounts are furnished by B2 Bank, NA, Member FDIC.
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.
The cash balance in your Cash Account is eligible for FDIC insurance when it is swept to our partner banks and out of your brokerage account. Unless the cash balance is swept to partner banks, they are no longer held in your brokerage account and are not protected by SIPC insurance. FDIC insurance is not provided until the funds participating in the sweep program leave your brokerage account and into the sweep program. FDIC insurance is applied at the customer profile level. Customers are responsible for monitoring their total assets at each of the sweep program banks. A complete list of participating program banks can be found here.
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