HSAs offer more than just tax advantages for medical expenses. You can also invest any idle cash into various investments for a potentially higher return.
For 2019, IRS contribution limits for family HSAs are $7,000, while for individuals they are $3,500. HSA savings are generally FDIC-insured. However, investments generally are not. Verify with the HSA plan you’re considering.
You’ll also need to have a high-deductible health plan to qualify for an HSA. There can be other restrictions but your HSA provider can help with details on eligibility.
Note that most employers will cover the HSA monthly fee. But if you are choosing an HSA that is different from the one offered with your employer health plan, you’ll likely need to cover any monthly fee. Or, if you've left your employer and are looking for a good option to move your HSA too - check out this list.
Keep in mind that most HSA plans do not allow you to participate in multiple HSA plans.
In this article, we’ll provide a summary of several attractive HSA plans that also offer investment options. Remember, we love using our HSA as an IRA - and think you should too. Check out these companies for the best places to invest your HSA money.
Currently, our top picks for the best HSA are tie between Lively and Fidelity. Bother offer a truly free HSA - free to save and free to invest. Lively allows investing with TD Ameritrade for free, while Fidelity is their own brokerage.
1. Fidelity Investments
Fidelity is well-known for its investment offerings, including employer-sponsored 401(k)s. They are lesser-known for offering HSAs. But you can get an HSA directly through Fidelity.
Fidelity’s HSA offers a plethora of features, including (Editor's Note: These features are from the website):
- "Account features—debit card, checkwriting, electronic funds transfer, and bank wire."
- "Online Fidelity BillPay®—an efficient, convenient way to make online payments for qualified medical expenses."
- "Account management—online account opening, balance inquiry, transaction history, and beneficiary designation."
- "Fidelity core positions, plus thousands of mutual funds available through Fidelity FundsNetwork® (which are subject to investment minimums). There is no fund minimum for Fidelity Asset Manager® and Fidelity Freedom Funds®. You can also invest in individual securities (stocks, bonds, ETFs) which are subject to commission fees. Visit Fidelity.com to view the commission schedule. There are no additional investment maintenance fees."
- "Reporting—integrated Fidelity Account® statements and aggregate employer and tax reporting (1099-SA and 5498-SA)"
- "Track and Pay – Manage health care claims, payments, and receipts all in one place."
U.S. equity trades are $4.95. Although, you also have access to no-transaction-fee funds and research provided by Fidelity at no charge.
As of November 15, 2018, Fidelity has a consumer-facing HSA that is free! That makes it the best HSA account currently available to consumers.
Lively offers an FDIC-insured HSA account with the following features (Editor's Note: These features are from the website):
- "Free health savings account for individuals. No hidden fees."
- "FDIC insured. Your money is safe. Interest included."
- "100% paperless. We don't waste your time."
- "Invest for FREE"
- "Simple. Intuitive. Transparent. Sign up in 5 minutes."
If you are an individual, Lively is free for their basic HSA. Interest on your savings are as follows:
Average Daily Balance
Interest Rate / APY
Less than $2,500
$2,500 to $4,999
$5,000 to $14,999
Note: these rates are current as of November 31, 2018. Rates are subject to change. Please see Lively's website for the most up to date rates and fees.
As of December 20, 2018, Lively eliminated their last remaining fees. You can invest 100% for free at TD Ameritrade. This is very competitive to other HSAs. Plus, you can invest 100% of the balance of your HSA (no cash minimums required).
With access to TD Ameritrade, the number of investments and asset classes available to you are fairly broad. These include individual stocks, bonds, CDs, over 250 commission-free ETFs, and more than 13,000 mutual funds. In addition to the $2.50/month fee for investments, there are investment transaction fees. You can see a fee schedule here.
But, if you're using commission-free ETFs with low expense ratios, this is an excellent choice.
3. HSA Bank
HSA Bank has many of the features common with modern HSAs such as online access and a mobile app. Medical expenses can be paid from your HSA account using a check, debit card, or bill-pay system.
HSA Bank offers investment options through TD Ameritrade Self-Directed Brokerage or DEVENIR Self-Directed Mutual Fund Program. You can read more about both here.
Where HSA bank lacks is it's fees. You pay $2.50 per month in your HSA bank account if you don't maintain a minimum balance of $5,000. That's a lot of money to keep in cash earning very little interest.
HSA Bank also charges a $3.00 per month Investment Service fee. So, you could end up paying $5.50 per month to HSA bank (or $3.00 if you keep that $5,000 in cash). That's more than Lively's $2.50.
4. Optum Bank
Optum Bank is part of Optum, a technology services division, which is part of UnitedHealth Group. If you work for a major company, this will likely be your default HSA for your company health plan. Their monthly fee is $2.75/month (usually covered by the employer). There is no minimum balance to get started. Features of this plan include a debit card, checking, online banking, and a mobile app.
Optum Bank is a member of the FDIC, currently services over three million accounts and $9 billion in assets under management.
There are a large number of investment options available with Optum Bank. You’ll need to first meet the $2,000 investment threshold. Once you do, you can rebalance your portfolio and easily move money back and forth between investments and your main account. To see the current listing of investment options, check here.
The bummer about Optum's investing is that you have to use their platform, and their fund choices. They are okay, but aren't typically the best out there. You also don't get the flexibility of being able to invest on a platform like TD Ameritrade.
However, if you leave your employer, you will start seeing your monthly fees deducted from your account - and Optum isn't the cheapest option.
Other HSA Providers
There are several other HSA providers available, but not all of them make our list of the best for one reason or another. Many of these are smaller providers, might not offer robust investing options, or charge higher fees that the providers on the list above.
Some others to consider include:
Health Savings Administrators
Health Savings Administrators is an HSA provider that does offer a solid choice of investments, including Vanguard funds, but they do charge higher fees than others on this list. They current charge $45 per year in administrative fees, plus 6.25 basis points per quarter (this is $0.625 per $1,000 each quarter). That's relatively expensive compared to other providers.
Check out Health Savings Administrators here.
HealthEquity is an HSA provider that also offers a solid choice of investment options, including Vanguard mutual funds. They allow both individuals and employers to open an HSA. The currently charge $3.95 per month in administrative fees, however, they will waive the fees if a certain balance is met ($2,500 in combined cash and investment balance).
Check out HealthEquity here.
Inland Bank is a smaller HSA provider that offers both accounts to individuals and employers. On the individual account, they offer a free HSA account that doesn't allow investing. If you want to invest, you must maintain a $2,500 minimum and they charge $2.95 per month. And the investments are limited.
Check out Inland Bank HSA here.
Further is an HSA provider that allows you to invest through Charles Schwab. As such, you get access to a lot of investment choices through Schwab, which offer their own great low cost mutual funds. Further does charge an annual fee for their investment option accounts, plus at least an $18 per year fee as well.
Check out Further here.
Elements Financial is pretty close to making the top of the list, but they are relatively unknown at this point. They have a free HSA option if you maintain at least a $2,500 minimum account balance, otherwise it's $4 per month. There is also the option to invest in your HSA through TD Ameritrade, very similar to Lively.
Check out Elements Financial.
Saturna is a name that comes up a bit when talking about HSAs because they have a unique fee structure that could work in favor of some people compared to the options in the list above.
They have the potential for a no fee HSA, if you trade at least once per year in your account (which most people will do as they invest new funds). They offer commission free investing with their affiliated funds, otherwise they charge $14.95 per trade. For most people, this will likely be more expensive that other options on this list.
Check out Saturna here.
Compare All HSA Options Here
Check out all the HSA administrators and plans here. Compare your HSA Administrator options.
Self Employed Plans?
$4/mo unless over $2,500 balance
Yes, through TD Ameritrade
Yes, through Fidelity
$0 - $4 per month
With paid plan - through Charles Schwab
$0 - $3.95 per month
Health Savings Administrators
$45 per year plus 6.25 basis points per quarter
$2.50 per month without $5,000 balance & $3.00 per month to invest
$0, or $2.95 to invest
Yes, through TD Ameritrade
$2.75 per month
Yes, with $2,000 minimum that must be kept in HSA cash
$0, but some fees may apply
Yes, free with their affiliated funds, otherwise $14.95 per trade
Choosing the Right HSA for You
As you can see, most HSA providers offer comparable services, making it difficult to choose any particular one. One way to narrow down the choice is to investigate the HSA offered with your employer’s health plan. It will likely meet your investment needs.
If you're no longer with your employer and are looking to move your HSA, look at free HSA providers like Lively, who also offer investment options.
Among the shortlist above, you’re sure to find an HSA provider who can check all of the boxes you’re looking for.