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How M1 Finance’s Smart Transfers Works

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If you haven’t heard of M1 Finance’s Smart Transfers feature yet, then prepare for the next level of finances. This new feature is geared towards savvy investors that want a little more automation in their life.

The Smart Transfers option offered by M1 Finance is meant to make all of their investor’s lives a little simpler, while making their money work harder for them at the same time. 

What is M1 Finance’s Smart Transfers feature?

M1 Finance has just rolled out a new feature to all of their clients to help put their money on autopilot. The Smart Transfers feature allows clients to set it and forget it.

You, as the client, get to set threshold-based rules within the Smart Transfers feature. And by doing so, your money is automated to move between accounts. This is a new, smarter way to invest your money without having to regularly monitor it.

How does the Smart Transfers feature work?

The Smart Transfers feature works by allowing you to create sweeps between your M1 Spend and Invest accounts. Basically, you choose one of the accounts to monitor for a balance threshold. Once the account you choose reaches the balance threshold, everything else will be automatically moved, or swept, to the other account.

This threshold balance is for the cash balance of the account though, not the total account value. If your cash balance falls below the designated threshold, the sweeps will temporarily halt until the account gets back up past the cash balance threshold. 

Once the feature sweeps the money to your other account, that money begins accruing interest. Currently, their Spend accounts have a 1% APY and the taxable Invest accounts can get an average market return, depending upon your investment portfolio.

Spend Plus Checking → investing

Before the Smart Transfer feature was available, M1 Finance members would have to schedule their own one time transfers. And for those of us who are extremely busy living life, that meant things like this could get left by the wayside. Accidentally, of course. 

But now you can schedule all funds over a predetermined cash threshold balance to be transferred automatically into your taxable Invest account. For example, let’s say you decide that you want to always have $1,000 in your Spend Plus Checking account. You can create the cash balance threshold at $1,000. Anytime more than that is in your checking account, the money will be automatically swept over into your taxable investment account.

How M1 Finance’s Smart Transfers Works - When Spend is over $1000

To set up the Smart Transfer from a Spend Plus Checking account into a taxable Invest account, go under the “Transfers” tab at the bottom of the app and then click the “Move Money” option.

Next, select “Smart Transfer” and then “Spend Overbalance.”

From there, choose your balance threshold amount (in this case, $1,000) and then which account the money should be swept into (Invest). Then review and confirm the Smart Transfer and you’re done!

That way you get maximum exposure to the market and don’t have to put any more work into it.

Investing → Spend Plus Checking

If the situation is reversed, however, and you want to have more of a cushion in your Spend Plus Checking account, you can do that too. All you have to do is schedule the proceeds from cash or dividends to transfer into your checking account. That way, as soon as the money is moved over, it begins to count towards the 1% APY.

The process is almost exactly the same as moving money from the Spend Plus Checking to Investing. The only difference is that you will click the “Invest Cash Over-Balance” option instead of the “Spend Over Balance” option.

Then you have to make sure to choose the maximum cash value you want in your taxable M1 Invest account. Put that number in and then choose the option to transfer the excess to your M1 Spend Plus account.

And then you’re done and ready to go! The process for both options really only takes a couple of minutes, which saves a ton of time in the long run.

Can the Smart Transfers feature be changed?

Yes, Smart Transfers can be changed. This was an initial concern for me since a lot of companies make it extremely difficult to change anything without a signature, blood sample, or firstborn child. 

In fact, you can edit, pause, or delete any or all of your Smart Transfers whenever you want to, with the touch of a couple of buttons. 

If you want to edit a current Smart Transfer, simply act like you are moving money and find the Smart Transfer you want to change. Then click on the amount, change it to a different amount, and then click “Update.”

If you want to pause a current Smart Transfer, it’s even easier than editing. All you have to do is move the toggle switch from inside the specific Smart Transfer from on to off. Done!

 

And if you want to delete a current Smart Transfer, then just click the “Delete” button at the top right corner of the transfer you want to get rid of. It will ask you to confirm the deletion and then you’re done.

No matter which edit or correction you want to make, M1 is making this whole process pretty darn simple.

Who should use the Smart Transfers feature?

Anyone who is an M1 Finance client should really look into this feature. As one of the top robo-advisors on the market today, they are constantly trying to make the platform more intuitive. The development of their Smart Transfers feature is just one of them.

So, if you have a Spend Plus Checking account and one of their taxable Invest accounts open, or are planning to do so, then this is a great option for you. 

Who isn’t the Smart Transfers feature for?

M1 Finance has quite a few different options when it comes to investment accounts. In fact, their current offerings include:

However, right now the Smart Transfers option only works between the Spend Plus Checking and taxable Invest accounts. So, if you have one of the other types of investment accounts offered by M1 Finance, then this isn’t for you. Yet. 

But keep checking back because they say they are announcing some new changes and additions in the next month or so.

Does the Smart Transfers feature cost anything to use?

Yes and no. The Smart Transfers feature doesn’t cost anything to use. That is, if you have an M1 Plus account already. M1 Finance offers their M1 Spend account for free, which is how most of us generally start out. But, the Smart Transfers function only works with their M1 Plus accounts right now.

In order to upgrade from the basic M1 Spend account, you will have to pay a $125 fee. While that may seem a bit steep, there are quite a few perks that come with it. On top of having access to the Smart Transfers feature, you also:

  • Earn 1% APY on their high yield checking account.
  • Earn 1% cash back on qualifying debit card purchases.
  • Qualify for 2% loans.
  • More flexibility with the trading window for your Invest account.

Therefore, if you are already using M1 Finance and love it, but haven’t upgraded your account, it may be something to consider. Especially if you love the idea of the Smart Transfers feature!

Summary

First and foremost, if you haven’t joined the M1 Finance platform yet, they’re definitely worth considering. The Smart Transfers feature is only available to M1 Finance clients. So you won’t have access to this great tool without being a client. If you are a member already, then you should consider putting the Smart Transfers feature to work for you. Making your money work harder for you without you working any harder has never been easier!

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