What are Smart Transfers?

 

Smart Transfers are available for M1 Plus users with an open M1 Spend account. 

Smart Transfers allow you to create “Overbalance" or "Underbalance" Smart Transfers, or sweeps between your M1 Spend, taxable Invest accounts and IRAs.  

There are three types of transfers that can be created: 

  1. M1 Spend overbalance- Set a maximum cash balance for your Spend account and automatically transfer the excess into an Invest account.   
  2. M1 Spend underbalance- Automatically refill your Spend account when it falls under a certain balance.  
  3. M1 Invest cash overbalance - Set a maximum cash balance for your Invest account and automatically transfer the excess cash into another one of your M1 accounts.  

You can pay back an outstanding principal balance in an eligible M1 Margin Loan account by using Smart Transfers. You can also select an eligible M1 Margin Loan account to borrow from when their Spend balance falls below a certain level by using the Smart Transfers Spend Underbalance.  

Retirement accounts can only participate in overbalance Smart Transfers (no under-balance features). IRAs always have a built-in endpoint of “until the yearly contribution limit is reached,” but can set an additional endpoint on top of it, like “no more than $1,000 a week”. An M1 Margin Loan is only available for margin accounts with a balance of at least $10,000 and does not apply to retirement accounts. 

 

Spend Overbalance  

To create an overbalance transfer: 

  1. Select a source account (Spend, taxable Invest or IRA) to monitor for a specific cash balance.
  2. Select the balance amount that will trigger a Smart Transfer.
  3. Choose the destination to send the funds over your set balance (Spend or taxable Invest).

The Smart Transfers rule will run every time your source account’s cash exceeds the selected threshold and the cash will be swept from the source account to the destination account. 

Keep in mind that Overbalance Smart Transfer allow for the automated movement of cash. 

Smart Transfers will not sell securities in a taxable Invest account in order to transfer money to Spend. Also, the threshold you input is for the cash balance of the account, not the total account value. 

If your source account’s cash balance ever is below your threshold, the Smart Transfer will stop temporarily until you’re over that threshold again, and then the rule will automatically restart. 

Sweeps will generally follow the same transfer timing as other ACH transfers.  

Example 1: Spend to Invest 

Sam doesn’t need more than $1,000 in his checking account, and he’d rather contribute the rest to his Invest account.  

He used to watch his account and transfer money anytime he was over $1,000 in Spend.  

With Smart Transfers, Sam can set a up a rule that automatically directs any excess cash above $1,000 in Spend to Invest.  

Example 2: Invest to Spend 

When Kelly’s Invest account builds up cash from dividends or sales, she’d like to move that cash from Invest to Spend.  

Kelly can set up a Smart Transfers rule that directs any excess cash in Invest to Spend. This will happen automatically, and she will be earning the APY in Spend as soon as it becomes available. 

  

Spend Underbalance  

To create an underbalance transfer: 

  1. Select a source account (Spend, taxable Invest, or IRA) to monitor for a specific cash balance.
  2. Select the balance amount that will trigger a Smart Transfer.
  3. Choose the destination to send the funds over your set balance (Spend or taxable Invest). 

The Smart Transfers rule will run every time your source account’s cash is less than the selected threshold, and the cash will be swept from the source account to the destination account. 

Keep in mind that Underbalance Smart Transfers allow for the automated movement of cash. 

Smart Transfers will not sell securities in a taxable Invest account in order to transfer money to Spend. Also, the threshold you input is for the cash balance of the account, not the total account value. 

Sweeps will generally follow the same transfer timing as other ACH transfers. 

Example: Spend to Invest 

Sam wants to have more than $1,000 in his checking account and he’d like to cover the difference using an M1 Margin Loan.  

He used to watch his account and transfer money whenever he was under the $1,000 in Spend. 

With Smart Transfers, Sam can set a up a rule that automatically takes a Margin Loan to keep the account at $1,000 from Borrow to Spend. 

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How can I create Smart Transfers?

1. Under the Home tab, click the “Move Money” button.

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2. Select “Smart Transfer 

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3. Select the type of Smart Transfer you want. This will be the source account that excess cash will be transferred from. 

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4. Select the balance to trigger the transfer and a receiving account. Remember, any cash exceeding your inputted balance will be swept from your source account to your receiving account. Set an endpoint for the Smart transfer to be triggered at. 

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5. Once you’re done inputting your details, click “Create Smart Transfer 

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6. Review your Smart Transfer, and if everything looks correct, click “Confirm 

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How can I view and change my Smart Transfers? 

  1. From the Home tab, select “All activity” and then “Rules” 
  2. Select the Smart Transfer you want to view.  

To edit your Smart Transfer: 

1. Click “Edit” in the top right corner 

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2. Make your changes  

3. Click “Update”  

4. Click “Confirm” 

To pause your Smart Transfer:

Toggle the “Enable Smart Transfer” switch at the top of the screen to off.

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To delete your Smart Transfer:

Click “Edit” in the top right corner then click “Delete” in the top right-hand corner.

Be sure to confirm your changes. 

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If you have further questions, please contact us. 

 

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