Here’s a list of financial terms and M1 terms to enhance your understanding!

If you’re new to M1, also be sure to check out our intro webinar that breaks down all you need to know about using your account.

Account rejected – Any newly opened account can be ‘rejected’ which means additional documentation is needed before it can be activated. M1 needs a government ID and utility bill as verification documents. You can upload your requested document(s) in the Home screen. Clients are often ‘rejected’ because of a security freeze, a typo with their biographic information, or they are between the age of 18-23 and do not have an extensive credit history.

Connecting your bank & transferring money.

Micro-deposit – When connecting your bank through micro-deposits, two small deposits are sent to your bank within 1-2 business days to verify your connection between your M1 Invest Account and your external bank.

Plaid – Plaid is a third-party bank data service that M1 works with to perform external bank account authentication and identity verification. Learn more about Plaid.

Deposit – Money transferred from your external bank into your M1 Account.

Withdrawal – Money transferred from M1 into your external bank account.

IRA Contribution – An IRA contribution refers to the amount of money you invest into your IRA(s).

An IRA overcontribution occurs when you contribute past the yearly limit. This can result in a 6% tax penalty. Contact us if you believe you have overcontributed to your IRA.

IRA Distribution – An IRA distribution refers to the amount of money you take out of your IRA(s).

A premature IRA distribution can result in a 10% tax penalty.
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M1 Invest allows you to open the following account types to invest your money intelligently:

Stocks – Shares in the ownership of a company that represent a claim to the company's earnings and assets. Your return on investment depends on the performance of that company.

To learn more about stocks, please visit FINRA's website.

Funds – An exchange-traded fund (ETF), is a security that tracks an index, a commodity, a set of bonds, or a basket of assets.

ETFs blend aspects of mutual funds and stocks. Like mutual funds, ETFs are pooled investment funds that offer investors an interest in professionally managed and diversified portfolios of investments.

Unlike mutual funds, ETF shares trade like stocks on stock exchanges and can be bought or sold throughout the trading day at fluctuating prices.

To learn more, please visit FINRA's website on exchange-traded funds.

Mutual funds and options – Mutual funds and options trading are not supported on M1.

All securities available to be included in your portfolio must be listed on either the New York Stock Exchange or NASDAQ.

Over-the-Counter (OTC) securities – OTC securities are highly liquid and actively monitored for volume and market capitalization. These securities are not listed on a national securities exchange.

M1 offers a select number of OTC securities. For a list of OTC securities M1 supports, click here.

Corporate action – A corporate action occurs when a company makes a decision affecting shareholders and results in a significant change to a company's stock. This can take the form of a mandatory or voluntary corporate action. Learn more about corporate actions.

Portfolio – Your portfolio is made up of Slices. Add Custom Pies and Model Portfolios to organize your stocks to your liking. Each Pie is a Slice in your Portfolio.

Pie – A Pie is a group of stocks and ETFs, or crypto. Pies can be used to organize your portfolio and your investment strategy. Make your custom pie under the Research tab and set your target weights percentages. Model Portfolios are built by M1 and can also be added to your portfolio.

Custom Pie – A Custom Pie is a Pie that you build yourself! You can select between any stocks supported on M1 to build a Pie that meets your individual needs. Make your Custom Pie in the Research tab and set your target weight percentages.

Model Portfolio – A Model Portfolio is a Pie that is built by M1. These Pies are regularly reviewed by M1 and adjusted and/or rebalanced routinely to fit its unique investment objective. These Pies can also be added as a Slice to your portfolio.

Slice – A Slice can be an individual stock or a Pie. Portfolios can have a total of 100 Slices. To increase this limit, please contact us.

Auto-invest – When this function is on and your cash balance exceeds $25, M1 will invest the funds automatically into the portfolio using the Dynamic Rebalancing method. You have the option to turn Auto-Invest off and make manual orders if you would prefer.

Dynamic Rebalancing – Every trade made with Auto-Invest on is through Dynamic Rebalancing. As prices of securities change over time, your initial target allocations may not equal your actual allocations due to the performance of the holdings in your portfolio. This might result in a portfolio that no longer aligns with your investing style. The algorithm identifies Slices that are most relatively underweight compared to your initial target allocations and puts money in those first.

Manual Rebalance – A manual rebalance can take place on your full portfolio or one Pie within your portfolio. This can be done by clicking the ‘Rebalance’ button and M1 will sell overweight securities and use the proceeds to buy underweight securities. Your target percentages will become your actual percentages for each security.

Manual buy/sell order – As an alternative to using Auto-Invest, you can place manual buy or sell orders on the portfolio, individual Pie(s), or individual Slice(s). On the Portfolio tab, directly select the Pie or Slice and choose either the buy or sell button. Please make sure your Auto-Invest is toggled off when placing these orders.

Trade window – The trade window is the window of time each weekday when M1 makes all trades for clients' accounts. M1 has 2 trading windows: 9:30am ET and 3:00pm ET.

Apex Clearing – Apex Clearing Corporation is one of M1's clearing firms and custodial banks. The money and securities in all your M1 Invest Account(s) besides your M1 Individual Brokerage Account(s) are held by Apex.

Apex is a leader in digital wealth solutions and is consistently selected as the clearing firm for tech savvy fintech firms. For more information, please visit Apex Clearing.

Understanding performance on your M1 Invest Accounts.

Overweight – When the current value of a Slice is above its target value in your portfolio.

Underweight – When the current value of a Slice is below its target value in your portfolio.

Net cash flow – The net amount of cash and cash equivalents transferred in and out of your account.

Cost basis – The original value of an asset for tax purposes. Learn more about cost basis.

Money-Weighted Return (MWRR) – M1's performance is based on Money-Weighted Return (MWRR). MWRR is built to track an individual's portfolio performance taking into account all incoming and outgoing cash movements.

Tax minimization strategy – M1 uses a tax-minimization strategy for any sell orders in your account. When M1 sells securities, we prioritize the lots to sell in this order:

1) Losses that offset future gains

2) Lots that result in long-term gains

3) Lots that result in short-term gains

An M1 Margin Loan is a simple way to borrow money against your M1 Invest Account at a low cost. Margin Loans allows you access to a flexible portfolio line of credit offered at one of the lowest interest rates on the market—no paperwork or credit check needed.

You can take an M1 Margin Loan of up to 50% of your portfolio value at 7.25%.

Interest rate – The interest rate that is charged for Margin Loan funds. Margin Loans charge a variable interest rate that tracks the federal funds rate.

Margin – Margin refers to the money that is borrowed from a brokerage firm to purchase an investment.

Line of credit – The line of credit is what is available for you to borrow in your M1 Margin Loan account. You can see how much money you have available for a Margin Loan in the Borrow tab. To make a payment, visit Borrow and select "Pay Back."

Maintenance margin/ requirement – The minimum amount of equity that must be maintained in a margin position. Learn more about these requirements.

Maintenance call – If your equity value falls below our maintenance threshold, M1 will issue a maintenance call. The margin threshold usually is 30% of your account value, but M1 may impose additional restrictions based on the risk of stocks held or portfolio concentration. Learn more about maintenance calls.

A Personal Loan is cash that is borrowed for personal use such as debt consolidation, home improvements, medical expenses, moving or relocation, vacations, special occasions, or major purchases.

B2 - B2 Bank National Association (B2), Member FDIC, formerly known as The First National Bank of Buhl, is a nationally chartered bank purchased by our CEO in the fall of 2021. M1 Personal Loans are furnished by B2 Bank NA, Equal Opportunity Lender, and serviced by M1 Spend LLC, a wholly-owned operating subsidiary of M1 Holdings, Inc.

Cash Account - A cash account, or cash management account, is an account that can combine services and features that are like checking, savings, and/or investment accounts under one product. Cash accounts are typically offered by nonbank financial institutions.

While the M1 High-Yield Cash Account is an interest-bearing account, it is not furnished by a bank and is instead offered by M1 Finance, LLC, an SEC registered broker-dealer, Member FINRA/SIPC. The M1 High-Yield Cash Account is a type of brokerage account.

B2 - B2 Bank National Association (B2), Member FDIC, formerly known as The First National Bank of Buhl, is a nationally chartered bank purchased by our CEO in the fall of 2021. For the M1 Cash Sweep Program, M1 partners with B2 in order to transfer your Program Deposits from your Cash Account to your Deposit Account(s) at FDIC-insured Participating Banks.

Savings Account - A savings account is defined as a potential interest-bearing deposit account held at a bank or credit union.

The M1 High-Yield Savings Account is a traditional savings account furnished by B2 Bank, NA, Member FDIC and offered by M1 Spend LLC, an affiliated entity of M1 Finance LLC (our broker-dealer).

Please note, we are temporarily pausing new M1 High-Yield Savings Accounts from being opened at this time.

B2 - B2 Bank National Association (B2), Member FDIC, formerly known as The First National Bank of Buhl, is a nationally chartered bank purchased by our CEO in the fall of 2021. The M1 High-Yield Savings Account is the first deposit product held by B2, which marks a major step in building a digital private financial institution that’s accessible to all M1 clients.

M1 Spend holds your Owner's Rewards Card by M1.

The Owner’s Rewards Card by M1 is a credit card that:

To learn more about the card, visit our Help Center.

Deserve – M1's partner for the Owner’s Rewards Card. For more information, please visit Deserve.

Celtic Bank – The Owner’s Rewards Card is issued by Celtic Bank, a Utah-Chartered, Industrial Bank, Member FDIC. For more information, please visit Celtic Bank.

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M1 disclosures here.