This Fidelity HSA review has been updated for 2024. If you’ve completed research in an attempt to find the best HSA account (see our rankings), you’re probably well aware that it is a bit of the “Wild West” out there. Because health savings accounts (HSAs) are still a relatively new type of investment account (they didn’t even exist prior to 2003), they have been slow to get the attention and resources of the big players in the investment brokerage world.
In fact, until recently, zero of the largest investment brokerages – Vanguard, Schwab, Fidelity, E-Trade, and Ally Invest – offered HSA accounts for individual investors (though Schwab has offered self-directed accounts to other HSA providers).
What we’ve been left with is a number of small independent banks that don’t specialize in investment accounts, taking lead. A small bank creating an investment platform on its own is near impossible, so the HSA administrators that are out there typically charge annoyingly high fees for the administration of the HSA account, as it is their only revenue source from the account, then outsource the investment component to a 3rd party (usually Schwab). Or, alternatively, they offer no brokerage investment options at all.
Fortunately, this is no longer the case. Fidelity now has individual HSAs. In doing so, they have become the first large investment brokerage to break into the HSA space for individual investors. Fidelity had previously offered employer-sponsored HSA accounts, but not individual HSAs.
This is a promising development for the personal finance world. And, it’s a scary development for existing HSA administrators, most of whom are very underwhelming in their investment offerings. So, what I wanted to do here is provide a Fidelity HSA review.
For starters, if you’ve been following along, you know that I’m a big fan of HSA accounts. After getting a 401K match, I believe that HSAs are the best type of retirement account to contribute to. HSAs offer tax-free contributions (and investment growth), while withdrawals for qualified medical expenses are also tax-free. HSAs are portable, meaning you own the account and can take it with you from one employer to another or to self-employment. And if you don’t use HSA funds for medical expenses, you can withdraw them in retirement – for any purpose – just like an IRA, without penalty, starting at age 65.
Meanwhile, Fidelity previously slashed its fees in order to compete directly with Vanguard and Schwab, when it announced:
- Zero minimum investments to open accounts
- Zero account fees (including account closing/transfer)
- Zero domestic money movement fees (e.g. bank wire)
- Zero investment minimums on Fidelity retail and advisor mutual funds and 529 plans
- Significantly reduced and simplified pricing on existing Fidelity index mutual funds
- Zero expense ratio mutual funds (Fidelity ZERO Index Funds)
Also in recent years, Fidelity’s commission-free ETF lineup was expanded to 2,500+, and all ETF and stock trade fees were eliminated.
And, finally, even if you already have an existing HSA account, you can get a Fidelity HSA. Anyone can have multiple HSA accounts (similar to IRAs) and can contribute to an HSA outside of employer payroll deductions – though you will want to make sure you first get any employer matching to your employer-sponsored HSA. Note that you must have a qualified HDHP to initially get and then continue contributing to an HSA.
Fidelity has 2 types of HSA accounts – let’s review both of them in more detail.
Fidelity HSA Self-Directed Brokerage Account Review Details
I’ve taken an in-depth look into Fidelity HSA self-directed brokerage account details, and here is what I found:
- Account Type: participants choose (self-directed) their own investments.
- Minimum Balance: There is no minimum balance to open a Fidelity HSA.
- Opening Fee: There are no account opening fees or money transfer fees.
- Trading Fees: $0 for stocks and ETFs.
- Account Management Fees: no account management fees.
- Maintenance Fees: no monthly account maintenance fees for individual HSAs.
- Investment Options: It appears that the full array of regular Fidelity investment options are available within HSAs. Standard Fidelity investment commissions apply.
- Investment Minimums: There are no investment minimums on Fidelity retail and advisor mutual funds.
- Debit Card: Fidelity HSA accounts come with a Fidelity debit card.
Fidelity Go HSA Account Review Details
Fidelity’s 2nd type of HSA account, “Fidelity Go”, is newer. Here’s the details:
- Account Type: Fidelity Go HSA accounts are managed by Fidelity, “We choose and manage your investments for you, taking into account your goals and risk tolerance.”.
- Minimum Balance: There is no minimum balance to open a Fidelity HSA.
- Opening Fee: There are no account opening fees or money transfer fees.
- Trading Fees: no trading fees (Fidelity manages).
- Account Management Fees: $0 for under $25,000 and 0.35% per year for $25,000 and above.
- Maintenance Fees: no monthly account maintenance fees for individual HSAs.
- Investment Options: Fidelity-managed. Invests in Fidelity Flex® mutual funds which do not charge management fees or, with limited exceptions, fund expenses.
- Investment Minimums: There are no investment minimums.
- Debit Card: Fidelity HSA accounts come with a Fidelity debit card.
Fidelity Go HSA also touts “unlimited 1-on-1 coaching calls”, which seems like a nice pro.
Fidelity HSA Review Bottom Line
I’ve funneled a portion of my existing HSA balances over to a new Fidelity brokerage HSA and can confirm all of the above information in this review. It’s hard to go wrong with a Fidelity HSA account from a fee and investment perspective. I personally prefer the self-directed HSA option over the newer Fidelity-managed “Go” HSA option for the lowest fees and investment options, but not everyone will have that preference. And to clarify, I have no relationship with Fidelity, financial or otherwise. I’d also recommend taking a look at Lively, which has a very similar offering (with no added fees to invest), but is focused 100% on HSAs.
Fidelity HSA Discussion:
- Who is your current HSA administrator? Why?
- Is Fidelity’s new HSA offering appealing to you? Why or why not?
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We have an HSA with Lake Michigan Credits Union (LMCU) because LMCU has NO opening, maintenance or transaction fees, and no minimum balance requirements.
The issue now is we don’t currently have an HDHP, which, if not mistaken, disqualifies us from opening an account or transferring over to Fidelity as we could not make additional contributions.
You may want to contact Fidelity on this. If you have funds you are transferring, it may be possible to do so, even if you do not currently have an eligible HDHP. You definitely would not be able to contribute new funds though. I’d suggest calling them to confirm.
I’m in the same boat as Garrett. No HDHP now but I have HSA money left over from a previous year when I had a HDHP. HealthEquity was slowly eroding my balance with their crazy fees ($3.95/mo + % of assets + expense ratios = crazy!!) and I started the process to transfer to Fidelity as soon as I heard about this. It’s been a few weeks and the transfer is still in progress but should be done this week. (HealthEquity made me sell all my funds into cash AND charged me a $25 “account close fee.”) While I can’t contribute new money right now, there should be no issue with the transfer.
My current administrator is HealthEquity, with administration fees ( $180/year), plus fund expense ratios. I use Fidelity for other investment, IRA, and 401K accounts. I’m happy to have this HSA option, and have already started the process to create the account, and to do annual HSA transfers from my employer sponsored account.
I’m happy for the greatly expanded index fund choices, lower expenses & fees, and consolidation under one brokerage umbrella, with excellent customer service and website & tools.
Outstanding. Please report back on your experience!
I started to open a Fidelity HSA to look further at fees and investment options (my current HSA is with HSA Administrators). Found fee information buried in a 46 page document that had to be reviewed before setting up the account. (On page 28 of 46 – not sure if this is just for workplace HSAs or if this applies to individual ones as well???). Read below:
Annual fees
For Fidelity HSAs that are opened through, or serviced by, an intermediary, or in connection with your workplace benefits, Fidelity may deduct:
• an administrative fee of up to $12 per quarter ($48 annually) from your Fidelity HSA, unless it is paid by your employer (may be waived for households that were established before a certain date and meet certain asset minimums at Fidelity); and
• a Close Account fee of $25 per account.
Not sure I want to jump ship yet. Anybody else see this?
Melissa, that just applies to workplace HSA, not the newly available individual hsa. I’ve confirmed this through their online info about individual HSA, as well as directly with customer support.
Thanks for this post! I have a bunch of other retirement accounts at Fidelity but my HSA has been with PayFlex through my employer. Fees aren’t bad but they offer very limited investment options, and we’ve been handling our current medical expenses out of pocket and viewing the HSA as another retirement savings plan. So I started the process of opening an HSA at Fidelity and will probably keep the account at PayFlex for some low-risk amount and to keep payroll deductions but then make regular transfers of investment funds to Fidelity. From what I’ve read, it sounds like transfers between HSAs (trustee to trustee) are unlimited, unlike rollovers.
Thanks for the information. Similar to Bob, I have employer accounts at Fidelity and also an employer HSA at PayFlex. I opened a second HSA at Fidelity to allow my spouse to contribute the +55 catch-up amount. I opened it on-line with no problems. Only transferred a small amount to test the process. If we can transfer between HSAs, I will maximize the Fidelity account due to investment options.
How am I able to contact Fidelity to open an HSA?
I can’t find an email address or telephone number anywhere.
Thanks
This site has useful info, including phone
https://www.fidelity.com/go/hsa/why-hsa
Click the “open an hsa” button, and there is a phone number. I found the representatives very helpful and informative.
GE – I’m looking to see if you have any update since you open the account. I’m contemplating on opening one and want to know your feedback.
I have an Optum HSA. I have to keep a $5000 balance in the savings acct so there are no fees. A balance of $2000 so you can invest. The reminder I have invested in the stock market. I am not spending any of the money but using other funds to pay the bills so it can grow. Very interested in the Fidelity option if the investments are free.
I’m in the same boat as you Debra with Optum HSA. They seemed like one of the better HSA options before Fidelity opened theirs. I’ll probably be switching mine over in the next few days. That $2,000 cash requirement is annoying. I don’t want any lazy money!
My update – its been 6 months since I opened the account at Fidelity. The transfer process was easy — Fidelity took care of everything. Since it was a trustee-to-trustee transfer pulled by fidelity, there was no worry of an ‘accidental’ distribution.
the Fund options at fidelity were much better, much cheaper, and they now have many non-commission ETF and mutual fund options. I like having the HSA account side-by-side visible with my other brokerage accounts.