How To Use M1 Finance’s Smart Transfers Feature

Are you looking for a new way to make your money work more for you without having to work harder? Money Under 30 has something you might want to consider: automation. 

Online financial service company M1 Finance recently rolled out a new feature called Smart Transfers, and it’s perfect for those looking for a hands-off approach to investing. 

Here’s what you should know about this exciting innovation.

What Is Smart Transfers?

Smart Transfers is one of M1 Finance’s latest customer tools. With it, you can determine commands based on your threshold and automatically transfer your money from one account to another. Gone are the days of constant tracking and double-checking. Now, you’ll know exactly where you stand.

How Does Smart Transfers Work?

This feature lets you track the balance threshold for one of your accounts. When your balance hits that mark, the app will automatically transfer the remainder to a separate account. 

If you use this app, keep in mind that the threshold balance only applies to that particular account, not the whole balance. When your balance falls short of the specified threshold, M1 will stop moving your money until your account returns to its previous level.

Smart Transfers helps you do more with your money by offering 1% APY on the funds deposited into the second Spend account. If you open an M1 Finance Invest account, you’ll see market-level returns based on your investments. 

How To Use The Smart Transfers Feature

This feature lets you schedule automatic transfers for any cash that exceeds a preset threshold balance. 

Suppose you have an M1 Finance Spend Plus Checking account, and you want to maintain a balance of $1,000 at all times. You can set the balance threshold to that amount, and whenever you deposit more money, the app will move the extra funds to a taxable investment account.

To use the Smart Transfers feature for your checking and investment accounts:

 

  1. Log into your account
  2. Find the “Transfers” tab located at the bottom of the page
  3. Select “Move Money”
  4. Click “Smart Transfer,” then “Spend Overbalance”

 

At that point, you can set your desired balance threshold and specify the account you want the surplus moved to. After that, you just need to make sure everything is correct and confirm the changes. 

Moving funds from your investment account to checking is just as simple. You can set a date when you want the returns on your investments to deposit into your checking account. This allows you to start earning that 1% interest. 

When setting up this option, follow the same steps as before, but this time, select “Invest Cash Over-Balance,” not “Spend Over Balance.”

After that, pick the highest amount you want to maintain in your investment account and select the choice to transfer the dividends or cash to your checking account.

Who Should Use Smart Transfers?

If you’re an existing M1 Finance customer, you should certainly take advantage of this feature. This company is on the cutting-edge of robo-advisor services, so if you aren’t a client, you may want to consider signing up. It offers a variety of investment accounts, including

 

  • Individual taxable accounts
  • Roth IRAs
  • SEP IRAs
  • Traditional IRAs
  • Trust accounts

 

Currently, you can only use the Smart Transfers for Spend Plus Checking and tax-liable Invest accounts, which means savers with other M1 Finance investment accounts can’t use this feature yet. However, M1 Finance is working diligently to provide this service for all of its customers. 

Are There Fees Associated With This Feature?

The feature itself is free if you are already an existing M1 Plus customer. That means if you have a free Spend account, you have to pay $125 to upgrade. While this charge may be a sticker shock, you’ll get a number of benefits such as:

 

  • 1% APY on high-yield checking accounts
  • 1% cash back on eligible debit card purchases
  • 2% loans
  • Greater versatility for trades

 

And, of course, you’ll also get access to the Smart Transfers feature. So if you have an account with this company and haven’t upgraded, you might want to do so. It’s a great way to get more out of your money without having to do a thing. 

With the new year right around the corner, you might be looking for new ways to improve your finances. One way to get started is by learning more about M1 Finance’s Smart Transfers feature.

 

Source
  • Bell, Shanah. “How M1 Finance’s Smart Transfers Works.” Money Under 30, 30 Nov. 2020, www.moneyunder30.com/how-m1-finances-smart-transfers-works.
Ian Schindler