How to Find the Best Health Savings Account

How to Find the Best Health Savings Account

I recently got to do something I’ve been wanting to do for a long time: enroll in a high-deductible health insurance plan that qualifies me for a health savings account (HSA).

I know, I know. It’s not exactly a dream vacation or even a new iPhone. But what can I say? I’m a huge money nerd and this kind of thing gets me excited.

And you know why? Because health savings accounts are badass. They let you:

  • Contribute money tax-free,
  • Invest the money tax-free, and
  • Withdraw the money tax-free for medical expenses

That’s right, they are the ONLY savings account that allows you to save and then spend your money COMPLETELY TAX-FREE.

This makes them a fantastic way to save money on medical expenses. But it also makes them quite possibly the best retirement account out there. Every other retirement account either taxes your money on the way in (Roth IRA) or on the way out (401(k) and Traditional IRA).

A health savings account lets you skip taxes all the way through.

So yeah, I was pretty excited about the chance to finally open one and start contributing!

Of course, this new opportunity brought up a big question: what’s the best place to open a health savings account?

I’ve done this research for a few clients before, but this was the first time I was forced to do it for myself. And to be honest, every time I’ve looked into this I’ve found the search to be a little confusing. There are a lot of options and a lot of different variables to consider, and it can quickly feel overwhelming.

So in this post I’m going to share the steps I took to find the best health savings account for my personal needs. Here’s what we’re going to cover:

  • How I plan on using the money in my health savings account
  • The factors I considered when looking at different accounts
  • The search tools I used to find and compare HSA providers
  • Which providers I ended up liking and why

I do want to be clear up front that I’m actually not an expert on this specific topic and that it’s entirely possible that there are better providers than the ones I chose, especially if you have different needs or preferences than I do.

But my hope is that by showing you my process, it will be easier for you to find the right health savings account for your own needs when the time comes.

Quick note: This is an updated version of a post I originally wrote in 2015. It’s been updated primarily to reflect the fact that I would choose different health savings accounts today than I did at that time. Those updated choices, and the reasons for them, are detailed below in an effort to help you make the best choice possible given the current options available.

My goals: how I plan on using the money in my health savings account

How you plan on using the money in your health savings account has a big impact on how you should invest it, and therefore who the best provider might be.

If you plan on using the money for current medical bills, keeping it in some kind of savings account probably makes the most sense. If you plan on investing it for the long-term, you would probably prefer a provider with solid investment options.

Looking at my personal needs, my family is pretty healthy. Aside from the occasional ear infection and other little trips to the doctor, mostly for our kids, we don’t typically have much in the way of medical expenses.

Still, I like the idea of having some dedicated money set aside in case we run into a larger than expected medical bill. And having it in a tax-advantaged place like a health savings account is pretty appealing.

So here’s the simple plan I came up with:

  1. Keep $2,000 of our HSA in a safe investment. Something like a savings account where we can earn some interest and know that the money will be there when we need it.
  2. All HSA contributions on top of that $2,000 will be invested in line with my personal investment plan.

The factors I considered when comparing HSA providers

My two different goals introduced a little complexity to my search for the best health savings account. After all, the best provider for a safe, interest-earning account might not be the same as the best provider for long-term investing.

Still, in either case the first step was to collect information and figure out what my options were. Here are the main variables I considered.

Interest rate – This was a bigger factor for the $2,000 I wanted to set aside specifically for medical expenses. While the difference between 0.1% and 1.5% on $2,000 certainly isn’t life-changing (about $28 per year), all else being equal I would rather earn more than less.

FeesFees are always a big deal with any kind of investment account or savings account, and HSAs are no different. I looked at setup fees, annual fees, monthly fees, trading fees, overdraft fees, debit card replacement fees, and anything else they may be able to charge me. The lower the fees the better.

Eligibility – A lot of the health savings accounts with competitive interest rates are run by local credit unions that have eligibility requirements, such as living in a particular state. Sometimes these requirements could be waived with a small contribution to a local charity and sometimes not.

Ease of use – Could I utilize online banking and was the website easy to navigate? Did they provide a debit card for easy payment at the point of care? Could I apply online or would I need to print out and mail in a bunch of paper forms?

Investment options – For the long-term investment portion of my money, I wanted to see high quality, low-cost investment options that aligned with my personal investment philosophy.

Minimum balance – Was there a minimum balance required to open the account? Did I need to maintain a minimum balance to either earn a certain interest rate or avoid certain fees?

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The search tools I used to find and compare HSA providers

I ended up using three main tools to find and compare health savings account providers.

I started with the site HSA Rates, which was particularly helpful for finding health savings accounts with competitive interest rates. Here’s how I used it:

  1. I updated the Amount field to $2,000, since this was the amount I planned to contribute.
  2. I left the State field as All because I’m comfortable doing all my banking online, even if there isn’t a branch near me.
  3. Starting at the top of the search results, I clicked the + sign for each option to see more about fees, online access, and eligibility requirements.
  4. For any providers that looked interesting, I clicked through to their site to learn more and see if their might be any fine print.

That was the most helpful site for finding an HSA provider for my safe money because I could quickly look through the accounts paying the best interest rates and make a list of the ones I was eligible for.

Another site that could be helpful, thought I didn’t end up using it much, is hsasearch.com. I didn’t find it to be as helpful as an initial search tool because you have to click through to each individual page to see details of each account, as opposed to hsarates.com where you can see it all right on the search page. But they do have a compare tool that could be an easy way to compare a few different providers side-by-side. I made my own spreadsheet for this purpose, but you might find the website easier to use.

The other tool I used was simply Google. This was especially useful for finding good health savings accounts for the investment side of things, where the two sites above kind of fell short. I simply Googled “best hsa for investing” and got a number of good results. Here are the articles I found most helpful:

Which providers I ended up liking and why

Despite all my research, I haven’t actually opened a health savings account yet. That’s primarily because I’ll probably end up opening it through my business and I’m still trying to figure out which hoops I have to jump through to do that.

But I’m pretty sure I know who I’ll go with when it’s all up and running, so here it is.

For savings: Alliant Credit Union

Here’s what I like about them:

  • No major fees other than a $10 contribution to the charity Foster Care to Success to become a member if you’re not a local resident or otherwise eligible.
  • 0.65% interest rate. This isn’t the best I found but it was competitive.
  • Debit card to pay for medical expenses.
  • Online banking and a website that seems easy to navigate.
  • No minimum account balance.

Here’s the page where you can check out their health savings account.

Now, this wasn’t the best interest rate or lowest setup fee that I found. Some providers that I wasn’t eligible for had better deals, so depending on where you’re located and what organizations you belong to, you may be able to find a better provider than I did.

And there were a few providers I was eligible for who DID offer a better deal. For example:

But I chose Alliant over those other options for two main reasons:

  1. Assuming that I consistently keep my balance at around $2,000, the difference in fees and interest rates would only lose me about $10 per year.
  2. As it turns out, Alliant was also one of the most desirable investment options, but in order to use it you have to keep at least $1,000 in their savings account. So by sacrificing $10 per year in interest/fees, I was able to have all my HSA money in one place. That convenience was worth it to me.

For investments: Alliant Credit Union

Yep! The exact same company. I didn’t expect to be able to keep everything with the same company, but after reviewing all my options this seemed like the best move.

Here’s what I like about them:

  • Access to high quality, low-cost Vanguard index funds (right in line with my personal investment philosophy).
  • Easy online access.
  • No custodial fee (unlike some of the other options I’ll mention below).
  • The ability to have the savings and investment components of my health savings account with the same company.

Here’s the page that explains the investment aspects of their HSA.

They do have a $5.95 monthly fee, which I don’t love. But the alternatives I found weren’t much better in that regard.

They also require you to keep $1,000 in the savings component of their HSA, which may be a sticking point for some. But since I plan on keeping $2,000 there anyways, this didn’t matter to me.

Here are some of the other good options I found, along with why I didn’t end up choosing them.

SelectAccount – This one was actually brought to my attention by Vin in the comments and has since been added. Thanks Vin! There’s an $18 annual fee for the privilege of investing, along with a requirement to keep $1,000 in an HSA savings account that would earn between 0.10% and 0.20% interest. The initial investment options aren’t great, but once you have a $10,000 balance you can access Schwab’s brokerage platform, opening up a much wider range of investments. All in all it looks like a very good option.

HSA Bank – In all honesty, going with HSA Bank would have saved me a small amount of money. They charge a $5.50 monthly maintenance fee unless you keep $5,000 in the low-interest savings account, which I wasn’t willing to do. Still, that $5.50 is less than Alliant’s $5.95, and HSA Bank also has access to great Vanguard investments. In the end, the convenience of Alliant won out over the small monthly savings.

Saturna Capital – This is another good option that would actually cost less if I used it right. They have no annual or monthly fee but they charge you $14.95 per trade in your investment account, plus another $4 per year to reinvest the investment dividends. Assuming I invested in one stock mutual fund and one bond mutual fund, and that I made my entire annual contribution once per year, I would end up paying $38 per year, which is about $33 less than with Alliant. I’m not sure I would actually end up using it that way though, so for now I’m passing.

Health Equity and Health Savings Administrators – These two are very similar so I’m lumping them together. Both give you access to great investments. Health Equity has a $36 annual fee and Health Savings Administrators has a $45 annual fee, both of which are lower than Alliant. The big catch is that they each charge you about 0.25% on your account balance each year, on top of the annual fee, and that really adds up over time. That one fee was enough for me to pass on both options.

Excited to get started!

So that’s how I went about my personal search for a health savings account and how I found the best HSA providers for my personal needs.

I honestly don’t for sure that they’re the absolute best options out there, but I know they’ll do a good job of meeting my needs. And no matter what I’m excited to finally have access to this awesome account!

Have you ever done you own search for a health savings account? Which provider did you end up using and why?

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94 Comments... Read them below or add one of your own
  • Roger Wohlner August 25, 2015

    Matt great info on the different providers. As a whole the HSA is a great retirement planning vehicle especially in light of the estimated $200,000 or more that a couple is likely to spend on health insurance and other medical costs in a “typical” retirement. In fact an HSA may be the difference in retirement success and running out of money due to these high medical costs in some cases. In our case we are fortunate in that my wife’s employer contributes a certain percentage to her HSA as well as her contributions each pay period.

    • Matt Becker August 25, 2015

      Thanks for the insights Roger! Sounds like your wife’s employer has the right idea. It’s great to see people starting to embrace these accounts.

  • Dane Hinson August 25, 2015

    I have yet to open an HSA, however I definitely plan to use an HSA as one of my investment vehicles. I’ll definitely be bookmarking this one to evaluate providers once I move forward. Great article!

    • Matt Becker August 25, 2015

      Thanks Dane! I’m glad you found it helpful.

  • Danny August 25, 2015

    You should check out Elements Financial to compare to your group of choices. They have a $3/mo charge on a checking account under $2,500 but they pay 1% interest on that balance. They also give you access to TD Ameritrade which has a lot of commission free trade options like VTI (Vanguard Total Stock Market Index). I try to keep the $2,500 plus a cushion in the checking account and invest the rest in the brokerage account.

    The only bummer is that they recently started requiring a wire to send funds to your TD Ameritrade account instead of an ETF and they charge $24 per wire transfer. That essentially limits me to one transfer per year and I treat it like a $2 monthly account fee. Still more competitive than a lot of others, but I’m hoping for a work around soon.

    • Matt Becker August 25, 2015

      I did see them but I didn’t like that wire fee. I basically saw them as similar to Saturna Capital, but with a higher per trade fee AND a possible monthly charge. Maybe I’m missing something there though?

      • Danny August 25, 2015

        Yes, with the changes I think they are quite similar to Saturna Capital, though I don’t know what the interest rate they offer on checking account funds. In both cases, limiting your trades is the only way to keep costs low.

        I went to them initially when there was no account minimum or wire transfer fee and they’ve since implemented those additional costs. The only problem is that it still makes them competitive to the alternatives like HSA Bank or HSA Administrators so I have no motivation to switch yet.

  • Marta September 23, 2015

    I may have missed something so forgive me if this was already answered, but how do you use the money for retirement (non-medical related)?

    It is that time of year again and I can pick a high-deductible plan so I’m seriously considering this option with a HSA.

    Thanks!

    Marta

    • Matt Becker September 23, 2015

      Good question Marta! Once you reach 65 you are able with withdraw the money penalty-free, even for non-medical expenses. The money IS taxed, so in essence it ends up working just like a 401(k) or Traditional IRA.

  • Virginia October 14, 2015

    I’m currently comparing providers. How did Health Equity and Alliant Credit Union measure? Saturna is one I am also considering.

    • Matt Becker October 15, 2015

      I didn’t come across Health Equity in my search so I don’t know much about them. Alliant Credit Union definitely looked like a good provider though for the short-term savings portion. I’d love to hear what you end up choosing!

    • Rodney Monk July 20, 2016

      stay away from health equity the only one that gets Equity is them. fees

      • Rodney Monk July 20, 2016

        looks like $3.95 per month

  • Wendell Schott October 21, 2015

    Hi Matt…I enjoyed how concise you went over the HSA options. Since your review was a couple of months ago and some banks have continued to drop their rates, I just wanted to check with you to verify with you that Michigan credit union is still the best option. I’m getting a miserable 0.35% on nearly a $30,000. balance, whereas my HSA with Freedom Bank initially started paying about a 3.00% when I opened it there several years ago. I look forward to your reply. Thank you, Wendell (Largo, FL in Pinellas County.)

    • Matt Becker October 22, 2015

      Thanks Wendell! And good question. The honest answer is that I haven’t checked interest rates again since I wrote this. I’m guess that since it was relatively recently, not a whole lot has changed, but I don’t know that for sure.

      Also, I didn’t mean for this to be an outright endorsement of any particular bank. What I really intended was to show you how to do this same search for yourself so that you could find the right account for your own particular needs. Everyone’s situation is different, and my hope is that this article gives you the tools you need to find your own way.

      Let me know if there’s anything else I can help with!

  • J M October 28, 2015

    I have a quick question if you put in a lump sum the max amount for 2016 this is already taxed money. how does the tax advantage work? you will be refunded the money when you file your 2016 taxes then? Unfortunately, I live in NJ and HSA contributions are taxed in NJ…but at least the interest earnings aren’t taxed. does anyone have any additional information that could be helpful?

    • Matt Becker October 29, 2015

      Let me start by saying that I am not an accountant and I’m therefore not 100% familiar with the exact logistics, but I believe that it would simply be counted as a deduction when you fill out your tax return, which would serve to either reduce the taxes you owe or increase your refund.

  • Janice November 15, 2015

    This is a great post, exactly what I was looking for! However, I was all set to sign up with Health Savings Administrators, but then I saw that they also charge a custodial fee: “The custodial fee is 6.25 basis points per quarter (i.e, $0.625 per $1,000 every three months) with no cap. Fee is deducted from the account balance each quarter.” This is a not insignificant amount, especially if you’re planning on using the account for investing. If you have $20,000 in the account, the charge would be $12.50 per quarter, or another $50.00 per year! That’s on top of the $45 fee you’re already paying! http://healthsavings.com/members/fees/ You may want to check the fine print on your account and make sure you’re not being charged this “custodial fee”. It made the difference between this HSA provider and another one for me.

    • Matt Becker November 16, 2015

      Oh wow, that must be new. Thanks for pointing it out Janice! I’ll update the post to make sure people know about that.

      • Ben Goodman January 6, 2016

        Just confirmed Janice’s assertion about Health Savings Administrators. For my wife and I with two accounts and total balace of around $26K the annual fees would be a whopping $155.00!! Pretty steep!

        • Matt Becker January 7, 2016

          That’s too bad! I always hate to see companies adding fees.

  • Tom Anderson November 16, 2015

    I am new to your site Matt. Enjoyed the read of HSA. My question is, what is the maximum amount you can annually fund in a HSA?

    • Matt Becker November 16, 2015

      Thanks Tom! For 2015 the max contribution is $3,350 if you have individual coverage and $6,650 if you have family coverage. For 2016 it’s $3,350 for individuals and $6,750 for families. You can read more about how HSAs work here: How to Find the Best Health Savings Account.

      • Laura Baynham February 16, 2016

        Don’t forget the additional $1,000 catch-up option for persons over 55 y/o

        • Matt Becker February 16, 2016

          Good call! You’re absolutely right. That’s a valuable extra contribution if you’re eligible.

  • Justin Chidester December 9, 2015

    Opening an HSA is something I’ve been dragging my feet on for a while now, but reading this article (coupled with realizing this morning that I’m set to have a tax liability for 2015 if I don’t do some year-end tax planning) kicked me in the butt hard enough to just get it done. This article is just what I needed. I just barely used the referenced links to search and compare HSA’s, and opened one within an hour 🙂

    One thing I realized just now as I was comparing HSA fees is that I needed to take into account my “net fee” based on the interest the account pays. I noticed a lot of the HSA providers that have “high” monthly fees also have the highest interest rates. If I am starting out my HSA with a lump-sum, any fees I pay can be cancelled out by the interest I earn. For someone like me who needed to drop a few thousand dollars in an HSA to lower my AGI this year, I just view this initial contribution as my “new zero” in the account, and anything I contribute above this initial amount is “fee-free” as it grows in the future, at a higher interest rate than is offered elsewhere (even though other places might have slightly lower fees).

    • Matt Becker December 9, 2015

      So glad to hear it helped Justin! Nice work taking action. And you make a great point too. A higher fee absolutely might be justified if the interest you earn outweighs it. And that break-even point is going to depend on how much money is in the account. Thanks for bringing up such a great point!

  • John McDermott December 15, 2015

    Any updates on ease of use for any on these sites? I used hsa bank a couple years ago and their interface and online banking was awful. It looks like they might have overhauled their site but wondering if anyone has any experience. My family will likely plow through the the account each year so I’m more interested in usability than investments. Also has anyone had experience with Alliant hsa?

    • Matt Becker December 15, 2015

      I don’t have any new updates for you John, but I will say that I have a few financial planner friends who have recommended Alliant to me at various points in time. I can’t speak specifically to usability, but that definitely seems to be a good option. Good luck!

  • Zack December 23, 2015

    As an FYI, Lake Michigan Credit Union requires a minimum of $5 deposit into a ‘member’s saving account’ in addition to the $5 ALS donation for a total of $10 to open a HSA. You do get the $5 member savings account money back when/if you were to close the account. Just thought I would update this as I recently opened accounts for my wife and I. It’s not a tremendous fee, but a fee nonetheless.

    • Patrickt December 28, 2015

      Shortly after stumbling upon your blog, I opened up an HSA at Lake Michigan Credit Union. I am completely satisfied with this financial institution. Without reservation I highly recommend them: their customer service is friendly, they rapidly respond to my calls(and emails), and the website is easy to navigate. Theyve also got a 6.25% interest rate on a VISA card — an excellent choice if you want to do a balance transfer. Thanks for the dumb luck!

      • Matt Becker December 31, 2015

        Great work! I’m glad it was helpful and I’m glad that it’s worked out for you so well.

    • Matt Becker December 31, 2015

      Thanks for the update! I hadn’t noticed that when I checked it out.

      • Ben Goodman January 6, 2016

        Just chatted with rep at LMCU … At this time they don’t offer any investment options for their HSA accounts. 🙁

        • Matt Becker January 7, 2016

          Yeah, I would really consider that one just a savings account with a good interest rate. Ideal for money you may want to use in the near future but not for long-term investment purposes.

          • Krystal November 14, 2016

            LMCU dropped their interest rate early 2016 to 1% regardless of amount in the account. Previously 1.5% interest rate on balances under $5,000. 2% on balances over that amount. Bummer because I keep a high amount in the account.

  • Jones January 10, 2016

    Matt,
    Thanks for the information – I have an HSA account that I am thinking of changing to another. Since I elected to opt out of my current employer’s medical coverage and switching to my wifes coverage, there is no High Deductible option. After reviewing IRS info, it appears you can rollover an HSA account to another HSA. Is this something you are aware of?

    Thanks

    • Matt Becker January 12, 2016

      Yes, you can absolutely rollover an HSA account. I would first decide where you want to open the new account and then ask them about their process for handling it. They will be able to help you. The one thing to watch out for is fees. The account you’re moving from may charge you to close the account or move the money, which may or may not be worth it.

  • Abhi January 15, 2016

    Hi Mike – you mentioned opening an HSA account through your business. Wondering if you found any small business HSA accounts that are worth looking at?

    Thanks,
    Abhi

    • Matt Becker January 15, 2016

      Good question Abhi. So what I will actually do (still in progress) is open a personal HSA account and open an HRA account through my business. Here’s a good reference that explains how this works: http://www.watsoncpagroup.com/SubS-Chap7.pdf.

      I haven’t actually set this up yet, so unfortunately I don’t have any provider recommendations for the HRA. I do know another financial planner who has used Tasc online so they may be worth looking into.

  • DELAINA January 20, 2016

    CHECK OUT THE FEES AT LAKE MICHIGAN. https://www.lmcu.org/docs/fees.pdf
    I THOUGHT THEY WERE PRETTY STEEP, ESPECIALLY THE WIRE TRANSFER FEES. BUT I LOVED ALL THE INFO YOU SHARED MATT, CHEERS!

    • Matt Becker January 20, 2016

      Thanks for the link Delaina. I don’t think that most people will run into most of those fees, but you’re definitely right that it’s something to look out for.

  • whocares January 23, 2016

    I found LMCU a few years ago. They have a good high interest reward checking account too.

    Ive added to the HSA 3 years now so Im over $10k. Its not worth paying any fees to invest such small amounts. Not to mention the fact that I might lose money.

    No need to withdraw any monies so I don’t think I even activated the debit card. I presume if I ever incur big medical expenses, I can just move some to my checking.

    • Matt Becker January 26, 2016

      I’m glad it’s worked so well for you!

    • roym March 9, 2016

      I recently contacted them about opening an account and asked if I could move money into my checking rather than use checks or debit card, and the answer was yes but with a $35 transfer fee.

  • swheatie23 January 27, 2016

    This was incredibly helpful. You said you hadn’t opened on yet because you’d probably open it through your business. I’m self employed and interested in learning more about opening an account through my business as well. Have you done this research and have any tips to share on that side of things? Thanks again!

    • Matt Becker January 28, 2016

      Good question! Believe it or not, I STILL haven’t gotten around to it. I will definitely be writing a post about it when I do though, so stay tuned!

  • linda January 30, 2016

    hi, Matt:
    looking forward your experience/steps to open your HSA via your own business.
    one thing I am still trying find out is that I myself use my employer’s HSA custodian so my contribution to HSA is pre-tax. But my friend is employed by a small business (50+persons) that offer HDHP, but no HSA custodian/administrator and offers no guidance/help to open HSA acct to make pre-tax payroll deduction. He can choose HSA acct in any brokerage that offers and contributes but how he can make sure his contribution is per-tax since there’s no W-2 indicates it? Thanks

    • Matt Becker February 4, 2016

      Good question Linda, and sorry for such a delayed response. No matter how the contribution is made it will be considered pre-tax for income tax purposes. That will be factored into his tax return at the end of the year.

      The advantage of having it deducted from your paycheck is that you can also avoid FICA taxes. He may be out of luck with that if his employer doesn’t offer that capability, but it might be worth asking again.

  • Randi Held March 10, 2016

    Thanks Matt for all the info. HSA info is not easily accessible.
    My husband and I are both over 55.
    Do we open individual HSA accounts for 2015 the max contribution of $3,350 plus $1000 if you have individual coverage or $6,650 family?

    • Matt Becker March 10, 2016

      You’re welcome Randi! For 2015 the contribution limit for people over 55 is $4,350 if you have individual coverage and $7,650 if you have family coverage. It does not matter whether you split those contributions up over multiple health savings accounts or one. The limit is applied to the sum of all contributions.

  • Randi Held March 10, 2016

    So, Can I open up one account for me for $4350 and another for my husband for $4350 or the total for both together cannot exceed $7650??

    • Matt Becker March 10, 2016

      Randi, it appears that I was slightly mistaken in my original answer and I apologize for the confusion. After a little more research, it appears that BOTH spouses can make the $1,000 catch-up contribution on top of the normal limit, but that those catch-up contributions must be made in separate accounts. See here.

      So in summary, for you are allowed to contribute $6,650 TOTAL across all accounts, no matter who opens them. Then are you ALSO allowed to make an additional $1,000 contribution to your account AND an additional $1,000 to your husband’s account.

      I hope that clears things up and again I’m sorry for the confusion here.

      • Patrickr June 2, 2016

        Matt, can you please clarify for the scenario I have in mind: in the case of a husband and wife both over 55, can individual HSA accounts be opened for each of them (thus benefitting from the $1,000 catch-up contribution on each account) even though there is only one (family coverage) health-insurance plan (where the primary insured is one of the spouses)? I.e., the second spouse doesn’t have their own HSA-qualified plan.

        • Matt Becker June 3, 2016

          Good question Patrick. This situation is a little confusing, as you can see by the fact that I gave an incorrect answer to someone asking the same question earlier!

          So here’s the deal:

          • On a family plan, you are allowed to contribute $6,750 as your base contribution (for 2016). You can do this in one account or two, but no matter what the combined limit is $6,750.
          • In addition to that, since you are both over 55 you can EACH make an additional $1,000 catch-up contribution. Those contributions would have to be made separately to your individual health savings accounts. (See here.)

          This assumes that you are BOTH covered by the HSA qualified plan, even though only one of you is the primary insured. If one of you is covered by a different, non-HSA qualified plan, then that person cannot make a catch-up contribution and the other person’s base contribution is only $3,350.

  • Jeremy March 19, 2016

    Thanks for sharing your insights, great post. I opened an account with First American Bank online a year or two ago. They allow you to start transferring funds to invest once your balance hits $2,000, but if you do decide to invest I was surprised to find out that there is a $4.95/mo fee (there were no fees prior to investing).

    Overall I am happy with First American. The online bill pay works well. After the research I did today, I don’t think I’ll be moving my account. I’m not in love with the short list of investment options, but at least they do offer Vanguard mid- and small-cap equity ETFs and one good corporate bond fund, all three of which have very low fees. Most of the other options had higher fees. I haven’t seen any disclosure on any other “% of assets” or trading fees, and if the only fees are $4.95/mo and the low index fund fees, I will be very happy.

    Overall I have found it very hard to understand the fee disclosures in my research. I hope a more progressive company like Sofi gets into this space and offers a more transparent option with low fees.

  • Dan March 28, 2016

    I max out the HSA contribution through my employer who matches $500. I pay for medical expenses out of pocket, but save my receipts. Can reimburse myself at anytime. Just earmark the receipt and keep with your tax return.
    Contribute through employer and save on payroll taxes.

  • Michael Kushma May 2, 2016

    I would like to steer everyone away from Health Savings Administrators. Not only are their fees ridiculous but they make you fill out a from and mail it in to close your account. Talk about a bunch of scammers.

    DON’T USE HEALTH SAVINGS ADMINISTRATORS!

  • dhanica danes June 21, 2016

    Valuable ideas – I learned a lot from the facts – Does someone know if my company might obtain a fillable GA DOL-1a document to fill out ?

  • Retired2013 July 11, 2016

    Hi Matt,

    I’ve had an HSA for awhile and had HSADMIN. Horrid! At over 65, I now have an HRA, but moved the funds in Jan. to LMCU based on reading your posts. Just checked online and they dropped the 2% yield to 1%. Bummer. I will only use $$$ for medical emerg, otherwise, I need to earn interest, & not pay annual fees. Online ssearch saw Connexus CU has a 2% HSA rate, but requires bill pay, and their reviews are pretty poor. Nothing listed for HSA reviews. If you know of viable options, please advise. Or do I need to stay where I am, be happy I have no fees to pay, and take the 1% APR. Thanks.

    • Matt Becker July 13, 2016

      It sounds like what you have now is pretty good, so I wouldn’t be in a huge rush to change it. But if you’d like to be able to invest at least some of the money, you could consider using HSA or Saturna Capital, both of which looked pretty good in the course of my research. I would also suggest clicking through to some of the resources I mention in the post so that you can search around yourself based on the specific criteria you’re looking for. Good luck!

  • Mike August 25, 2016

    Lake MI Credit Union reduced from 2% to 1% in April 2016.

  • Michael September 2, 2016

    I could be wrong but for Staturna Capital I believe that 14.95 fee applies to equity trades. You can still put money into their funds for free but they don’t seem to have any really low expense funds.

    • Matt Becker September 5, 2016

      You’re right that mutual funds are a mixed mag. There are some no transaction fee funds, but they come with minimum investment requirements and the list is fairly limited. Other mutual funds either have the same $14.95 trading fee or their own sales load. So for the most part it isn’t free, though if you like any of the no transaction fee funds it could be.

  • Mr Cole December 1, 2016

    Has anyone had experience with SelectAccount? Pricing seems reasonable if you have over 10k saved… Thoughts?

  • Angela Lang December 14, 2016

    Have any of you looked at Connexus on the HSA directory? It is a 1.5% APY and you can join by donating $5. I don’t see any other fees. Is there anything I am missing or should be aware of with joining them for my MSA? Thanks for all this fabulous advice. So appreciative.

    • Matt Becker December 16, 2016

      Good find Angela! Looking at their rate sheet, it looks like a tiered interest rate where you currently earn 0% on balances up to $99, 0.5% if your balance is between $100 and $499.99, 1% if your balance is between 500 and $4,999.99, 1.5% if your balance is between $5,000 and $14,999.99, and 2% if your balance is above that. So it’s a good option, but your balance would have to be fairly large to get to 1.5%.

      • Callie December 27, 2016

        I just found Connexus on hsarates.com today and FINALLY applied for my first HSA. Thanks for ALL of the helpful info, Matt! And the helpful hyperlinks. Seems like your hard work and investigation has helped many of us.

        • Matt Becker January 2, 2017

          You’re welcome Callie! I’m really glad to hear that it’s been helpful.

  • Sridhar January 6, 2017

    Hi Matt,

    I was checking the same. 1000$ contribution, and I put in the state of New Jersey. It gave me a huge list of banks. I also found Connexus as an option, however, do I need to have access to the bank (branch/ATMs) or is that not a big deal. Appreciate your input.

    • Matt Becker January 9, 2017

      Good question Sridhar. It depends on how you plan to use the account, but as long as you have online access and a debit card, there likely won’t be much need for a local branch. At least that’s been my experience.

  • Britt January 24, 2017

    Hey, Matt!

    This is an awesome article, I’m glad you reposted. I know the answer to this question but just thought I’d triple check…if my employer offers an FSA, then I’m no longer eligible for an HSA, correct? I’d love to not participate in the FSA and open my own HSA, but I did some research and don’t think it’s possible.

    Thanks!

    • Matt Becker January 24, 2017

      Good question Britt. I believe, though I’m honestly not 100% sure, that you can still contribute to an HSA as long as you don’t also contribute to the FSA. In other words, I believe it’s the contributing that disqualifies you, not simply having it available. I would definitely consult with an accountant, or even call the IRS, before relying on that though.

      It also depends on the type of FSA that you have. In some cases you’re allowed to contribute to both. Here’s a good overview: HSA and FSA In The Same Year.

  • Vin January 25, 2017

    Hi Matt! I recently did this research myself (using various online comparison tools including the ones you mentioned) and settled on SelectAccount for my HSA custodian. See here for the table of fees:

    https://www.selectaccount.com/products/hsa/

    My reasons for this option:

    1. Monthly fees are low (ranging from $4/month to $0), depending on what level of interest you’d like.

    2. You only need $1000 in the base account before you’re allowed to invest the remainder. This lower threshold means you have more of your money invested and “working for you” than sitting in an account earning negligible interest. Most of the HSA custodians I reviewed required $2000–2500 in the base account before being allowed to invest the remainder.

    3. In addition to the regular monthly charges, the investment account is only an additional $18/year. While the selection of funds (https://www.selectaccount.com/wp-content/uploads/SelectAccount-HSA-Mutual-Funds-03.31.15.pdf) isn’t amazing, there are a few Vanguard index funds that cover large-to-small cap and one high-yield bond to choose from. Given that, for most people, this wouldn’t be their main investment account, I felt the options here sufficed. Furthermore, if you have a balance of over $10K in your account, you have access to a self-directed HSA brokerage investment account with Charles Schwab which gives you access to more than 2,500 mutual funds, and any other stocks/bonds/investments of your choice.

    4. SelectAccount’s website interface is user-friendly.

    For example, if you use the ThriftSaver option ($1/month) and max out the HSA limit for the 2017 year ($3400), SelectAccount would allow $2400 of that to be invested. Lastly, if your overall account balance is more than $2500, the monthly fee is waived altogether (for the ThriftSaver option only). So, in this example, you’d only be paying $18 for the ENTIRE YEAR of maintaining both the HSA and investment accounts through SelectAccount, easily recouped via the investments. No other fees for setup, closing, or transferring of funds.

    It seems HSA options are wide-ranging, hope this helps someone.

    • Matt Becker January 26, 2017

      Thanks for the input Vin! I hadn’t heard of them but just checked them out and they do look like a good option.

      Like you, I’m not thrilled by the initial investment options but it seems like that would largely be a non-issue once your balance exceeds $10,000 and you have access to Schwab’s trading platform. I don’t know exactly which funds would be available at that point, but I’m guessing you would be able to find a few good ones.

      I’m also not thrilled about having to keep $1,000 in a low-interest savings account, but the truth is that the annual difference between this and Alliant would be pretty small and you could actually save money on the investment side of things. So that’s not really an issue either.

      All in all, it looks like a great provider and I really appreciate you pointing it out!

  • heather curless February 2, 2017

    Very helpful information. Do you have a high deductible individual health insurance plan? The HSA’s that I found required that (i.e Bank of America). Any opinions on that one? Thanks.

  • Al Scott March 15, 2017

    Matt,
    I currently have an HSA account with Health Savings Administrators. I have about $23,000 in four different Vanguard accounts. I basically have all my funds invested in the Vanguard accounts. Is there another HSA provider that has lower fees?

    I just discovered your website and blog. I truly enjoy reading your posts.

    • Matt Becker March 16, 2017

      Hey Al. I would look at some of the other HSA providers mentioned in this article. Health Savings Administrators is certainly good, but that ongoing 0.25% fee will definitely cost you assuming that you maintain a reasonably sized account balance. Some of the other providers have flatter fees that won’t grow with your account balance.

  • Lisa March 25, 2017

    Hi Matt-
    Just wanted to thank you for this thorough article and the follow-ups. I’m finally opening an HSA so I can lower my income tax. I’m debating between Alliant, Connexus, and Select. I can put a decent amount in (over $3K) to start and hate paying fees! Any new thoughts? Thanks!

    • Matt Becker March 25, 2017

      You’re welcome Lisa! I haven’t looked into this again since I updated this post in January, so what you see here is the best I’ve got. Good luck!

  • Angy April 9, 2017

    Adding more detail to this statement “In all honesty, going with HSA Bank would have saved me a small amount of money.” actually you won’t sicne HSA bank has 2 investment options onr has no annual fee but charges $6.95 per trade on TD Ameritrade and the other one has no trading fees but charges another $24 annual fee which will be on top $5.5 per month makes it to at-least $90 annually which is higher than Alliant charging $71.4 per year.

    I am going with Alliant thank you for the post!

    • Matt Becker April 10, 2017

      You’re welcome Angy! I would personally choose from their list of commission-free ETFs, so that wouldn’t be an issue for me. But if you wanted to choose different investments, you’re absolutely right that that would add to the cost.

  • Angy April 9, 2017

    Another detail with SelectAccount is once you able to open a schwab brokerage account there will be trading fees 4.95 per trade. So if someone contribute to the account monthly like me it’ll be another 4.95 per month.

    • Matt Becker April 10, 2017

      Similar to HSA Bank, Schwab offers a number of commission-free ETFs that I would be comfortable using, so most people should be able to work around this cost. But it’s definitely something to look out for and I appreciate you pointing it out!

  • MathewP April 14, 2017

    Thanks for the information Matt. I just opened an account with Alliant based on researching the available choices and the information you provided validated the same and it worked great.

    Just to update Alliant has a 0.65% savings for HSA but only a $100 min. So I should be able to put the rest into index funds with the $5.95/month fee. Even though the fee is not desirable, seems like the best choice. Basically I equated the fee to wipe out 1% of any returns from $6750 contribution for HSA to put it in that perspective. If one makes two year contributions the fee will be 0.5%.

    Also I had to speak to their customer support due to website error but their support team was first class which is another positive. ON another note found out their regular savings account gives 1.05% APR return and I opened one as well and will plan to park some cash there.

    Mathew

    • Matt Becker April 17, 2017

      Thanks for all the info Mathew! Very helpful.

  • Tina May 15, 2017

    Hi Matt,
    Can you tell me if it possible to roll-over retirement money in a 401k/403b to an HSA?
    Thanks,
    Tina

    • Matt Becker May 15, 2017

      Good question Tina, and one that I honestly didn’t know the answer to until you asked. I did a little research and it looks like you aren’t able to rollover directly to and HSA from a 401(k), but that you can potentially do it in two steps by rolling it to an IRA first and then rolling it from your IRA to your HSA. You can find a high level overview on this here.

      I’ve never done this before so I don’t know what the potential hang-ups are to this process. I would suggest talking to a CPA or other tax expert who’s familiar with this process before making any moves.

  • Brenda Bierly May 15, 2017

    Wow. Thanks for breaking it down so nicely. I have a question. My husband and I are covered under a single insurance policy, we are both over 55 and self employed. Are we allowed to have separate HSAs in order to take advantage of the catch up amount for both of us (i.e. $1,000 each?) Sorry complicated question. I hope I asked it correctly. Thanks again.

    • Matt Becker May 16, 2017

      You’re welcome Brenda! My understanding is that the normal family contribution amount can all be made to a single account, but the catch-up contributions must be made to different accounts. See here. So yes, you are allowed to have separate accounts.

  • Michelle June 18, 2017

    Matt,
    Seems your Health Equity info is out of date. They don’t have an annual fee or charge a percentage on cash balance. Just a monthly fee.

  • Penney June 25, 2017

    Hi Matt,

    Your article was very helpful. I was debating between Select Account and Alliant, and with your article I settled on Alliant.

    The online sign up process was easy but had a couple of confusing questions:
    1. it asked me if I wanted a high yield checking account in the middle of application process
    2. it asked me if i wanted convenience card that is associated with a regular saving account

    I ended up calling their customer service number because i wasn’t sure if I had to open either a checking or savings in addition to the HSA account for any amount above $1k for investment.

    it’s a Sunday and even through the lady on the phone was very friendly, she wasn’t able to give me an answer.

    In order to be able to invest (any amount above $1k), did you have to open any other accounts or could straight invest from your HSA account?

    Thank you!
    Penney

    • Matt Becker June 26, 2017

      I’m sorry the process was confusing Penney. I definitely wish that some of these companies had better user interfaces.

      So yes, they do require you to keep $1,000 in their basic HSA savings account. That works for me since I want to keep some money available for regular medical expenses, but I realize that it may not be ideal for everyone. If that doesn’t work for you, you might want to consider some of the other companies mentioned in the post.

I’d love to hear from you, please leave a comment