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, the top pick for the best HSA is Fidelity. They offer a truly free HSA - free to save and free to invest. Since they are their own brokerage, everything is in one place!
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.
However, you can get access to Fidelity's Zero cost funds in your HSA, which is awesome - commission free and 0% expense ratio.
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.
2. Lively
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."
The drawback to Lively versus Fidelity is that if you want to invest, you must maintain an account an TD Ameritrade as well as an account at Lively. It's not terrible, but it's an extra step.
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 | 0.25% |
$2,500 to $4,999 | 0.35% |
$5,000 to $14,999 | 0.45% |
$15,000+ | 0.60% |
Note: these rates are current as of January 25, 2019. 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, there may 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
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
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 $250 minimum and they charge $2.95 per month. And the investments are limited.
Check out Inland Bank HSA here.
Further
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
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 HSA
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.
HSA Administrator | Annual Fees | Investing Options | Self Employed Plans? |
|---|---|---|---|
Elements Financial | $4/mo unless over $2,500 balance | Yes, through TD Ameritrade | Yes |
Fidelity | $0 | Yes | Yes |
Further | $0 - $4 per month | With paid plan - through Charles Schwab | Yes |
HealthEquity | $0 - $3.95 per month | Yes | Yes |
Health Savings Administrators | $45 per year plus 6.25 basis points per quarter | Yes | Yes |
HSA Bank | $2.50 per month without $5,000 balance & $3.00 per month to invest | Yes | Yes |
Inland Bank | $0, or $2.95 to invest | Yes, limited | Yes |
Lively | $0 | Yes, through TD Ameritrade | Yes |
Optum Bank | $2.75 per month | Yes, with $2,000 minimum that must be kept in HSA cash | Yes |
Saturna | $0, but some fees may apply | Yes, free with their affiliated funds, otherwise $14.95 per trade | Yes |
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 Fidelity, 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.
Cooper The Millennial says
July 11, 2018 at 1:49 pmThe HSA is key to my future financial planning.
Another key point about the HSA is that if you can pay for out of pocket medical expenses from your monthly cash flow then you can effectively withdraw that same amount of money from the HSA tax free. You are basically reimbursing yourself for medical expenses, at any time. Ensure you keep receipts to document.
Robert Farrington says
July 11, 2018 at 4:21 pmI recommend you use your HSA to invest! So many more perks if you keep the money in the HSA and don’t pull it out early.
One of the many features that many people don’t realize is that you can reimburse your expenses ANYTIME! Not just in the same year. So, if you max your HSA, let the money grow, and then when you have a nice sum in the future, you can withdraw it tax free by providing those receipts from today.
Larry says
September 25, 2018 at 9:38 amI believe there is an error in the description for Lively. The $5.00 fee for debit cards applies to more than 3 cards, not transactions.
HSAuser says
November 2, 2018 at 2:10 pmI followed up with HSA Bank (I use them) after seeing that you mentioned $0 fee for balances in excess of $5,000. They charge me $2.50/month and I have much more than that with them. They told me they do not have a free monthly amount at any balance. You might want to correct your post.
Robert Farrington says
November 2, 2018 at 6:19 pmThat’s strange because it’s the current pricing reflected on their website: http://www.hsabank.com/~/media/files/fees_s1
However, are you maintaining the balance in the HSA savings account at HSA bank, or investing it. If you invest, you still need to maintain that $5,000 level in the cash savings account or it doesn’t count. That’s why HSA bank isn’t our favorite pick – you have to leave that $5k behind and invest beyond it to get the lower fees.
Marilou R says
November 30, 2018 at 6:05 amCan HSA accounts be invested in indexed funds?
Robert Farrington says
November 30, 2018 at 8:02 amYes! Investing your HSA in index funds is the best way to go! You can do this at both Fidelity or Lively.
Alex says
December 8, 2018 at 4:04 pmAccording to Fidelity website, Fidelity HSA account is created for EMPLOYERS only. Am I missing anything?
Robert Farrington says
December 8, 2018 at 4:05 pmAs of December 2018, it’s open to the public. They didn’t announce it but it’s available.
Bob DeLaCour says
January 3, 2019 at 4:38 amThe article states fee free for Lively. But the comparison chart lists a monthly fee. Fidelity states it does the annual IRS forms. Lively doesn’t mention reporting.
Robert Farrington says
January 3, 2019 at 1:07 pmHey Bob, good catch. Lively is free (as of Jan 1, 2019), we just missed the table, but that’s fixed. Lively handles all required tax reporting too.
Jenna says
January 15, 2019 at 5:35 pmWhat is the advantage of opening an HSA account without going through my employer, I’ve lost pretax funds. If I am putting post tax funds in an HSA, why shouldn’t I open a savings account?
Robert Farrington says
January 16, 2019 at 8:33 amIf your employer offers one, then go for it – unless the fees are killer and your can’t invest. You can always deposit via your employer and immediately switch to another company – there are no limits on in-service distributions like a 401k.
We talk about that here: How To Change Your HSA Provider
Second, if you don’t go through your employer, it’s still pre-tax. You report it when you file your taxes – just like you report traditional IRA contributions.
The real benefit to the HSA is long term investing. Check this out: https://thecollegeinvestor.com/17565/hsa-secret-ira/
Monica says
January 23, 2019 at 6:17 amSomething missing from the description on Optum Bank. The monthly maintenance fee is waived when the HSA average monthly balance is $3,000 or more.
Robert Farrington says
January 23, 2019 at 9:06 amHave a link to that? We haven’t seen it?
CJ Gorrell says
February 9, 2019 at 10:24 amI have a plan with Optom but then saw your post about fidelity and it had me thinking maybe I should switch.
I often take long breaks from work so the no fee for individual accounts is appealing.
On fidelity I see individual HSA investments are deductible from federal income, but they are subject to FICA where as an employer HSA investment is not.
While I’m not working that would be fine because 0*6.2%=$0,
But during employment, $3500 income used towards contributions would be 3500*6.2%=$217.
In that case wouldn’t it be better to go with whatever your employer offers vs getting an individual account?
Regardless of whether they pay the fees or you do, I think it’s better to go with an employer HSA account.
The only exception to me would be if your total income after deductions was greater than $132,900 (maxing out FICA contribution).
Robert Farrington says
February 9, 2019 at 12:02 pmIf you can contribute through your employer, I recommend that. You can then move your HSA account (even while working) to a better place. But if your employer is covering the fees, it’s moot.
However, if you’re not working, I’d definitely move to Fidelity. Even if you get a new HSA at your employer, you can have both accounts (your employers and your Fidelity).
vs says
February 21, 2019 at 7:16 pmThanks Rob. Excellent article enumerating HSA options and their pros and cons.
I’ve been using Optum for a few years but extremely dissatisfied with their service. Until I saw this article, I did not know Fidelity offers an HSA ! I’m going to move over to Fidelity. Thank you.
Robert Farrington says
February 21, 2019 at 8:20 pmThanks! Glad to hear this is helpful!
JC says
February 22, 2019 at 3:32 pmI have considerably more than $2500 in Health Equity between the cash balance and investments, but I am getting a $3.95 monthly fee. (The cash balance has no deteriorated to less than $2000 because of the monthly fees, but the amount in Vanguard investments through Health Equity exceeds $2500. How do I get the $3.95 fee stopped? No one has mentioned this when I have talked with three of their customer service employees.
Robert Farrington says
February 22, 2019 at 3:48 pmYou can find their fee information here: https://answers.healthequity.com/app/answers/detail/a_id/1648
It says to contact customer service as they “may” waive it.
TSA says
February 22, 2019 at 7:03 pmI had an HSA account with a high deductible insurance plan at my previous employer. I’m now on my husband’s insurance ( not a high deductible plan). His employer only offers an FSA, which I do not want to do. I still have funds in my HSA and want to continue to contribute since you don’t lose the funds like an FSA. My question is…can I still contribute to cover medical costs without a high deductible insurance plan? If I contribute with after tax funds, will I still have a tax advantage when filing taxes?
Robert Farrington says
February 22, 2019 at 8:13 pmIf you no longer have a qualifying health care plan, you CANNOT contribute to an HSA. However, you can still use and invest your HSA – and you probably want to roll it over to one of the best providers on this list.