The Best HSA Account Administrators

I have previously noted that the HSA is my pick for the best retirement account (matching aside).

I noted Fidelity’s recent move into HSA’s and wanted to refresh my picks for the best HSA account. Why are HSA’s so great?

  1. Tax-free (pre-tax) contributions and withdrawals for qualified medical expenses, employer contributions, and growth through investments.
  2. HSA account contributions fully roll over from year-to-year (unlike FSA’s).
  3. HSA’s are portable, meaning you can take them with  you from one employer to another or to self-employment. YOU are the owner of your HSA account and your employer can’t take the funds away from you.
  4. You can withdraw funds from HSA accounts in retirement like an IRA, without penalty and for any reason, starting at age 65.
  5. HSA’s don’t have required minimum distributions at retirement age.

The challenge with HSA’s, however, is that a lot of the big name financial players aren’t in the HSA space. And many administrators have a maze of fees to navigate. If you get stuck with the wrong one, it can be a drain on your balance.

When I first signed up for an HSA, I wondered how married I’d be to a particular HSA account. Could I switch if I didn’t like mine, just like an IRA? I’ve since done a lot of research on this topic, and here’s what I found…

Can you Switch HSA Account Administrators?

best HSA accountHSA’s are fairly new to the health insurance and investing worlds. They weren’t established until 2003. In 2008, only about 6 million American’s had one. But that number has more than tripled since, and now 21.8 million Americans have one.

The HSA marketplace is still young, but quickly growing.

HSA accounts can be started with banks, brokers, credit unions, and insurance companies. Any company that offers an HSA is referred to as an “administrator” or “custodian”. HSAs were originally designed for modest deposits through payroll, followed by frequent small withdrawals. This is why most started and are still through banks and credit unions (unfortunately, if you’d like to invest).

If you or your employer have picked a poor HSA admin, the good news is that you are not stuck with them. Just as with IRA’s, you can switch if you aren’t happy with your administrator’s policies and fees. A person contributing to an HSA is under no obligation to contribute to his or her employer-sponsored HSA. And you can contribute to an HSA outside of employer payroll deductions. Employers, however, may require that direct payroll contributions be made only to the sponsored HSA plan.

As with most things, it definitely pays to shop around. In this post, I’ll do some of the heavy lifting to get you started.

Best HSA Account Administrators List

There are far more HSA administrators out there than there are IRA brokers. The rub is that most are through banks and very few of them allow you to invest your savings in anything outside of their own money market accounts, CD’s, and other in-house financial products. And with bank rates as low as they have been, with low borrowing rates, those yields are not helping you much.

That’s key. If you can’t invest, as you would in a 401K or IRA, your HSA contributions are just sitting there, eroding with high health care inflation every year. Unfortunately, most online brokers do not offer an HSA account option.

So here is a list of some popular HSA account administrators. All offer a debit card included. Obviously, the lower the fees the better, but the best HSA account administrator is the one that suits your needs.
HSA AdministratorAnnual or Maintenance FeesSetup FeesOther FeesInvestment Options
HSA BankMonthly account maintenance fee: $2.50 for regular account, $3 for investment (waived on daily HSA balances of $5,000 or more).NoHSA Bank feesSelf-directed through TD Ameritrade. Trading fees apply. Or, Devinir pre-selected funds (0.45% annual fee which is invoiced quarterly).
Health Equity HSAMonthly account maintenance fee: up to $3.95 (waived if you maintain combined cash and investment balance over $2,500). NoHealth Equity feesChoice of 23 Vanguard mutual funds. .033% monthly investing admin fee.
Further HSA (formerly "Select Account"Monthly maintenance fee: $0-4/mo. Plan fees vary.NoFurther FeesFee of $18 per account per year: Further investment options when balance exceeds $1,000. If balance > $10,000, you can open a self-directed brokerage account with Schwab.
Optum Bank HSAMonthly maintenance fee: variesNoOptum Bank feesChoice of 31 funds.
Fidelity HSAMonthly maintenance fee: $0 for individual investorsNoFidelity HSA feesFidelity brokerage account. Check out my in-depth look at Fidelity HSA account details. No additional fees beyond brokerage commissions.
Elements Financial HSAMonthly maintenance fee: $4, $0 if daily balance is $2,500+NoElements Financial HSA feesInterest dividend based on account balance, or self-directed brokerage option through TD Ameritrade.
Saturna HSAMonthly maintenance fee: $0. With investment account, inactivity fee of $25 per year, if no trades (reduced to $12.50 for accounts holding only mutual funds)NoSaturna HSA feesSaturna self-directed investment account with $14.95 stock trades, no fee & no load funds.
Lively HSAMonthly maintenance fee: $0 for individual investorsNoLively HSA feesTD Ameritrade self-directed brokerage option. No additional fees beyond brokerage commissions.

Remember, you must have an HDHP to get and continue contributing to an HSA.

For more basics on HSA’s, check out the previous links and the IRS HSA guidelines.

Best HSA Account Discussion:

  • Who is your current HSA account administrator and what are their fees, policies, and investment options?
  • Have you invested within your HSA account?

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