For anyone with a High-Deductible Health Plan (HDHP), contributing to an HSA is a great way to save on taxes.
Optum Bank’s HSA provides about everything anyone may want in an HSA at affordable prices. With its full-service HSA product, you get access to saving, investing, a variety of spending methods, and live customer service. In fact, HSA customer service is available 24/7 by phone or email.
Whether you’re an employee or individual, Optum Bank can meet your HSA needs. In this article, we’ll review its features and costs.
See how Optum Bank compares on our list of the Best HSA Providers.
- Monthly fee for individual accounts below $3,000
- Employees often won’t have to worry about the maintenance fee
- Full-service HSA administrator with solid features and service
Optum Bank Details
$2.75/month (Waived When Balance Reaches $3,000)
Mutual Funds (Through Schwab)
Digitally-Managed Portfolios (Through Betterment)
Who Is Optum Bank?
Optum Bank is an HSA administrator. And it is one of the largest in the industry with more than $12 billion in HSA assets and servicing nearly 5.6 million HSAs.
Optum Bank is part of Optum, a technology-focused health and wellness company owned by United Health Group (UHG). It was founded in 2003 and is based in Salt Lake City, Utah. Optum Bank is not a traditional bank, but is rather a Utah state-chartered industrial loan corporation.
Most people first experience Optum Bank through their employer - as Optum manages many employer-sponsored HSA plans.
What Do They Offer?
Optum Bank offers various tax-advantaged health savings plans, including HSAs, FSAs, HRAs, and MSAs. In this article, we’ll focus on Optum Bank’s HSA offering.
Employees of Optum and UHG automatically receive Optum Bank as their HSA administrator. These employees don’t pay a fee for investing in their Optum Bank HSA account. Other employers may charge a monthly fee, which can be dependent on the HSA account’s balance. However, it's more common that the monthly fee is waived for employees.
Individual account holders, on the other hand, will incur a $2.50 monthly fee until their account reaches $3,000. After that, the fee is waived.
Qualified Medical Expenses (QMEs)
QME spending is at the heart of an HSA. As long as you follow IRS publication 502 or IRS publication 969, you’ll meet the spending requirements. Some examples of QMEs include medical, dental, vision, and prescription expenses.
Money going into the HSA is tax-free dollars. For employees, this is easy since contributions come directly from their paycheck.
For individuals, they are contributing taxed dollars. To claim those dollars as tax-free, the individual must include their HSA contributions on their tax return. Using HSA funds for eligible medical expenses works the same for both employees and individuals.
Spending Your HSA Funds
As long as your HSA funds are spent on QMEs, they’ll remain tax-free. Any interest earned in the account will also be tax-free.
There are several ways to spend your HSA funds:
- Debit card included with your account
- Request paper checks
- Bill pay
- Spend out-of-pocket and request a reimbursement from your account
Earning Interest And Investing
For non-invested funds at Optum Bank, you’ll earn interest at tiered rates. Unforunately, these rates are not publicly disclosed. To see your specific APY, you'll need to login to your account. You can also choose to invest your funds.
HSA accounts are triple-tax advantaged. This means:
- Withdrawals for qualified medical expenses are income tax-free
- All contributions to an HSA are income tax-free
- Any interest earnings and investment growth from deposits are income tax-free
Optum Bank is not a brokerage. Self-directed brokerage services are instead provided by Charles Schwab. Before you can start investing, your account balance must be at least $2,000. Once you've hit that savings mark, you can invest in a solid variety of mutual funds and target date funds.
You can also choose digitally-managed portfolios through Betterment with automatic rebalancing. It’s easy and fast to move money between your HSA and investment account..
You’ll also have access to Betterment advisory services to help with any investment questions or long-term financial goals that you may have.
(until min balance met)
(until min balance met)
Min For Investing
Up to 0.20%
Are There Any Fees?
At Optum Bank, you are not charged on any of the following:
- Check order fee
- Wire transfer fee
- Nonsufficient funds (NSF) fee
- Official check fee
- Excess contribution fee
- Returned deposit item fee
- Stop-payment fee
- Research fee
- Document copy fee
- Check processing fee (or ACH fee)
There is a monthly fee of $2.75, which can be avoided with a higher balance. The actual amount will depend on your employer. For individuals, the amount is $3,000. Additionally, the following fees apply if you choose to use these options:
- $2.50 per ATM transaction that Optum Bank charges plus any fees charged by the ATM’s bank.
- $20 to (outbound) transfer your HSA to another bank or custodian.
- $1.50 printed statement fee. You can choose online statement delivery to avoid this fee.
Finally, if you choose to invest some of your HSA funds, you'll be charged a monthly brokerage fee of 0.03% of your invested assets, up to a maximum of $10 per month. Thus, this brokerage fee only applies to the first $33,000 in your investment account.
How Do I Open An Account?
You can visit the Optum Bank website to open an account. The application process takes about 10 minutes to complete and there are no account opening fees.
Is My Money Safe?
Yes , Optum Bank’s website uses encryption and deposit account funds are FDIC-insured. However, any funds that you invest through Betterment are not FDIC-insured.
Is It Worth It?
There's a lot to love about Optum Bank. They've been servicing HSAs for nearly two decades, are reliable, and provide everything you’ll need in an HSA account. Plus, once you reach $3,000 in your account, the monthly fee is waived.
Even if you do have to pay the monthly fee (which is on the high side) Optum Bank could still be worth it for all of the services that you receive in return, especially it's investing options through Schwab and Betterment.
Optum Bank Features
$2.75/month (waived when balance reaches $3,000)
Printed Statement Fee
$1.50 (waived if customer chooses e-statements)
Account Closure Fee
Minimum Balance For Investing
0.03% monthly fee
Debit Card Issued
Debit Card Daily Spending Limits
ATM Cash Reimbursements
ATM Withdrawal Fee
ATM Withdrawal Limit
$300 per 24 hours
Customer Service Number
Customer Service Hours
Mobile App Availability
iOS and Android
Optum Bank Review
- Commissions and Fees
- Customer Service
- Ease of Use
- Tools and Resources
- Investment Options
Optum Bank is an HSA provider that offers multiple spending methods, investing through Schwab and Betterment, and 24/7 customer service.
- Debit card, check, or cash payments
- Bill pay service included
- Self-directed (Schwab) or managed (Betterment) investing
- 24/7 live customer service
- Monthly fee charged until account balance reaches $3,000
- $2,000 minimum balance required to start investing
- Fee charged on ATM withdrawals
Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page, or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared towards anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications including the New York Times, Washington Post, Fox, ABC, NBC, and more. He is also a regular contributor to Forbes.