Best HSA Provider for Investing HSA Money

A Health Savings Account (HSA) has three tax benefits: tax-deductible contributions to the account, tax-free additions to the account, and tax-free benefits deducted from the account when used for eligible medical expenses. In addition, the high deductible health insurance requirement (HDHP) usually has a lower premium. For most healthy people, HDHP + HSA is the best combination. The money contributed to the HSA can be invested for long-term growth. Until recently, however, it was not easy to find a free HSA provider with good investment opportunities.

Most HSA providers usually require a combination of:

• A monthly or annual maintenance fee

• A minimum amount to be kept in cash

• Transfers between a financial company and another investment firm

• A limited investment menu, sometimes with additional costs, in addition to the normal costs of the fund

Now an industry giant enters the room. Fidelity Investments started offering HSAs to the public on November 15, 2018. Previously, Fidelity offered HSAs only to individuals whose employer chose Fidelity as their HSA provider. Now people can open HSAs directly with Fidelity.

If you have an HSA directly with Fidelity, not through an employer or insurance company, you have:

• No minimum amount to open an account

• No monthly or annual maintenance costs

• It is not possible to maintain a minimum cash balance

• An integrated account; no transfer between different entities and back

• All investment options available on a regular Fidelity brokerage account, including low-cost index funds, ETFs, treasury bills, CDs, and more. See also: Key Loyalty Index Funds and ETFs.

No other HSA provider comes close to offering Fidelity. Compare with other popular HSA providers that offer investments:

Live transfer between Lively and TD Ameritrade for investment.

HSA Bank:

monthly fee if a minimum cash amount is not maintained; transfer between HSA Bank and TD Ameritrade for investment.

HSA authority:

annual fee; fixed investment menu.


monthly fee; Fixed investment or transfer menu between Future and Charles Schwab.

Brokerage Fees on Saturn:

Investment funds or fees increase the cost of each investment purchase and sale.

Bank of America:

Monthly fee (excluding the highest level of preferential premiums); fixed investment menu.

For your employer and for you

If you have a high deductible (HDHP) from your employer, he can now set up an HSA linked to a selected provider. Your employer can contribute any amount on your behalf. Your salary prices also go to that account. Your employer can pay you the benefits of this HSA. Save on Social Security and Medicare Taxes by Contributing Your Salary to the HSA.

This does not prevent you from having just one HSA. You can have two HSAs at the same time. The HSA investment options your employer chooses may not be as good as those of Fidelity HSA. After contributing to the HSA your employer has chosen, you can pay them for better investment options. You can keep the existing HSA open to accept other contributions. If you leave your employer or run out of HDHP, you can close your existing HSA and consolidate it into your HSA.

If you take out health insurance with an employer, you are alone. The insurer may offer an HSA, but you can choose your provider. You receive the deductible on your income tax return.

Transfer from an existing HSA

If you want to transfer money from an existing HSA to a new HSA, you can do it as an overpaid or overdraft.

A transfer does not go through you. There are no frequency restrictions for broadcasts. You will not receive 1099 transfer forms. The overpaid amount does not have to be stated on the tax return. However, your HSA provider can pay for outgoing bank transfers (some banks and credit unions cannot).

You initiate the transfer by completing a transfer request from the new HSA provider. A transfer can be complete or partial. Send the completed transfer request along with the necessary documents to the new HSA provider. They do this from there and ask for a bank transfer to your current HSA provider. Your current provider may ask you to transfer your account or close your account. If the account is still receiving a salary contribution, you can instruct the current HSA provider to keep the existing account open when you make the transfer.

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