M1 High-Yield Savings Account Review: A High-Yield Option Ideal for M1 Finance Users

Although interest rates have risen considerably in recent years, many branch-based banks still pay miniscule yields on savings accounts, so it can be worth it to look outside the traditional banking industry. The M1 High-Yield Savings Account offers one of the best APYs in the banking industry. In this review, we'll take a closer look at the M1 High-Yield Savings Account and who should consider it.

M1 High-Yield Savings Account has a stellar APY -- but it comes with a catch. You'll need an M1 Plus subscription to get that APY -- without it, your APY will be much lower. Explore all of M1's offerings to see if the $10 per month subscription is worth it to you -- it may not be for just the savings account. If you have a high savings balance that will more than out-earn the fee, it's worth considering.

Like most financial products, the M1 High-Yield Savings Account isn't a great fit for everyone. Here's a rundown of the perks and potential drawbacks you should know about before deciding if it's right for you.

Top perks

Competitive APY: The M1 High-Yield Savings Account pays an APY of up to 5.00%, which is on the high end of the best high-yield savings accounts we follow.

Up to $5 million is FDIC insured: With the recent high-profile bank failures in the United States, many savers are worried about the FDIC's $250,000 insurance cap. Like several tech-focused online financial companies, M1 is offering significantly more -- as much as $5 million in FDIC-insured deposits.

Essentially, the bank that partners with M1 to provide the account uses a network of partner banks to spread high-balance accounts around. This effectively takes advantage of FDIC insurance from several banks to ensure depositors' money is completely safe.

No minimum balances: Unlike some other high-yield savings accounts, the M1 High-Yield Savings Account has no minimum opening deposit, or any minimum ongoing balance requirement whatsoever.

M1 Finance ecosystem: M1 Finance is primarily an investment account provider, and has an excellent brokerage platform that offers individual and joint brokerage accounts, retirement accounts, and more. It also offers a credit card product, lines of credit, personal loans, and other financial tools. The M1 ecosystem is designed to let people invest, borrow, and save in one place, and is nicely differentiated from several other high-yield savings accounts.

What could be improved

The top APY requires a paid membership: Here's why we said earlier that this account is best suited to customers who use (or want to use) other M1 Finance products. To get the top APY, you'll need a paid M1 Plus subscription.

An M1 Plus subscription costs $10 per month (the first three months are free), and in addition to the higher savings APY, it comes with better cash back rewards on M1's credit card, more investment account options, discounted margin loan interest rates, a 1.50% discount on personal loan interest rates, and more.

No checks or debit cards: While it isn't common to be able to write checks on a savings account, it isn't unheard of to be able to access savings account money through an ATM with a debit card. The only way to withdraw money from the M1 High-Yield Savings Account is by transferring funds to an external, linked bank account.

No cash or check deposits: There is no way to deposit cash or checks into the M1 High-Yield Savings Account. There are no branches or ATMs available for use, and there is no mobile check deposit feature at this time. The only way to deposit money into the account is through electronic funds transfer from a linked external bank account.

M1 Finance doesn't have physical branches, nor does it have an ATM network available to customers. In fact, it's important to mention that M1 Finance isn't a bank at all -- the high-yield savings account is offered through a partnership with B2 Bank NA, which is also owned by M1's founder and CEO. As a result, the ways customers can deposit and withdraw funds to their accounts are rather limited.

Deposit options

The only way to deposit money into the M1 High-Yield Savings Account is by electronic funds transfer from a linked bank account. There is no way to deposit cash or checks into the account.

Withdrawal options

The only way to withdraw money from the M1 High-Yield Savings Account is by electronic funds transfer to a linked bank account. M1 is no longer offering its checking account product to new customers, so for practical purposes, you'll need to maintain a checking account at another institution.

The M1 High-Yield Savings Account could be a great fit for you if you have a significant amount of money in savings and want to maximize the yield you receive. It could be an ideal fit for people who use M1 Finance for other aspects of their financial lives, such as brokerage, credit cards, and personal loans, as the required subscription to receive the best APY has several other perks in M1's ecosystem.

Our savings account methodology

At The Motley Fool Ascent, we rate savings accounts on a five-star scale (1 = poor, 5 = best). We evaluate all savings accounts across four main criteria: annual percentage yield (APY), brand and reputation, fees and minimum requirements, and perks that really make a difference -- think ATM access, linked checking accounts, or even branch access.

Our scores are weighted as:

• APY: 50%
• Brand and reputation: 20%
• Fees and minimums: 15%
• Other perks: 15%

Learn more about how The Motley Fool Ascent rates bank accounts.