The 9 Best Health Savings Account Providers In 2022
If you dont have a good HSA account provider, theres never been a better time to move your HSA funds to a new one. HSA funds are portable, meaning that you can move them any time to a new account. This article will review my updated research and picks for the best HSA accounts in 2022 available to individuals and families .
The entrance of Lively and Fidelity into the Health Savings Account space, each with very competitive offerings, has resulted in a number of other administrators lowering their fees and improving their investment options, so this article is a complete annual re-write of my picks for the top HSA accounts, to help you make a switch for 2022.
Can You Invest Funds In An Hsa
While your funds are in your HSA account, you can invest the money into a variety of stocks, bonds, or mutual funds. Any interest that you accumulate in your account through the investments will be tax-free, just like your contributions. Typically your investment options will vary by the HSA provider you choose, so if investing is important to you, youll want to investigate each providers investment choices before making your decision.
Youll incur additional fees for investing your funds, as you would if you used a third-party to invest funds. Each provider charges different fees to manage your investment, typically ranging from 0.05% to 0.75% annually, depending on what you are investing into.
Our 2019 Rankings Of 11 Top Hsa Providers
Fidelity emerges as a clear winner in our checkup on health savings accounts.
This article has been updated due to an error regarding Fifth Third for investors. The new ratings are shown below.
Health savings accounts, or HSAs, continue to grow rapidly and have reached more than $60 billion in assets, nearly a 10-fold increase over the past decade. But choosing an HSA is challenging given the industry’s young, opaque, and frequently changing nature. What’s more, investors have limited resources available to help them navigate the hundreds of HSAs that exist. For these reasons, we released our first-ever evaluation of HSAs in June 2017 and published an updated evaluation in November 2018. We build upon that earlier research in this paper, which evaluates and ranks 11 of the largest HSA providers available to individuals and articulates what we consider best industry practices. Our evaluations identify which HSAs we believe represent the best choices for individuals as opposed to employers, where fees are often negotiable based on a number of factors.
Our assessments are shown below.
In summary, Fidelity, a new entrant to the individual HSA space, is the best HSA provider for both spenders and investors. For HSA spenders, Lively represents the second-best choice. For HSA investors, The HSA Authority and Bank of America are the next best picks. Besides Fidelity, The HSA Authority is the only other provider that we recommend to both spenders and investors.
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What Are The Best Places To Open An Hsa
Health savings accounts are offered by a variety of institutions. That can make the decision difficult, because each HSA bank has slightly different features. But narrowing your options down based on whether youre looking for an interest-bearing or investment account can help.
HSA Providers can also be referred to as an HSA Administrator, or HSA Custodian. These all mean the same thingthey are all IRS approved institutions that offer HSA accounts.
Affinity Federal Credit Union
The Affinity Federal Credit Union HSA account has no minimum deposit requirement and charges no HSA fees. It offers a debit card with the account, but no checking privileges are indicated. The account currently pays 0.25% APY and you can fund it with direct deposits. Its available primarily to residents of New Jersey and Connecticut, but theres a long list of exceptions.
Since most credit unions serve consumers who either live in a specific geographic location or work in a certain industry, its best to check with institutions in your local area.
Learn more:
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You Have A Plan For Your Business But What About Your Retirement
Onscreen disclosure 1: Please read important information at the end of this video.
Onscreen disclosure 2: Hypothetical small business owner is a paid actor. Not representative of any specific client experience.
Molly: I started designing jeans in my dorm room sophomore year. I never wanted to do anything else. 10 years later, I moved into this studio.
Now that I’m established, I want to make good decisions about my finances. I have some savings, a personal IRA, a few bonds.
But honestly, I don’t have time to think about dinner, let alone retirement.
I have a plan for my business. So I wanted one for my retirement, too. But with all this going on, I needed something simple, affordable and easy to manage. And that’s where Merrill came in.
When it comes to my future, every dollar counts. And with a retirement plan from Merrill, my business could benefit from potential tax advantages while I plan for retirement. And as I grow, Merrill could help meet my changing needs.
But it’s not just about me. My employees pour their life into what they do. So I owe it to them to provide a retirement plan that they deserve.
Merrill helped me understand that having a retirement plan doesn’t have to be complicated. I get personalized solutions based on my needs. And I’m not alone. I work one-on-one with a licensed Merrill Financial Solutions Advisor to consider my retirement plan options. So no matter how big or complex my company becomes, I always get the help I need.
Best Hsa Plans In Investment Options
Indeed, not everyone is in an HSA to pay for current medical expenses. Those accounts are more and more used as an addition to people’s 401 plans, to save on a tax-free basis for medical expenses at retirement or even add to their retirement assets. In those cases, they may not care about how easy it is to withdraw money from the account or what interest they can earn on lower-balance thresholds.
A popular choice among investors is Saturna Brokerage Services. Its offerings include nearly all mutual funds and ETFs. Investors have access to Saturna’s proprietary mutual funds Amana, Sextant, Saturna Sustainable for which it is the advisor. Saturna also offers access to stocks, bonds and a wide variety of non-Saturna affiliated funds.
Trading fees are higher than other providers $14.95 per online trade and $25 per broker-assisted trade. But if, say, you plan to make a single transaction yearly to transfer funds from your employer-based HSA to your individual account where you might have better investment options, Saturna could be a good pick.
If you plan to make many trades a year, try another provider like HSA Bank, SelectAccount, Fidelity or HealthSavings Administrators.
SelectAccount, whose custodian MII Life is a subsidiary of Blue Cross Blue Shield of Minnesota, offers a self-directed brokerage account with Charles Schwab for account holders who have more than $10,000 in an investment account. It charges $4.95 per online trade.
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The Best Hsas For Spenders
HSAs as spending accounts should follow these best practices:
- Offer spending accounts without maintenance fees regardless of account size.
- Pay reasonable interest rates on deposits.
- Eliminate or limit additional fees.
- Offer FDIC insurance on the spending account.
This years assessments reaffirm that Fidelity and Lively offer the most compelling options for spenders. Both providers charge no fees for spenders .
Three other providers–HealthEquity, HSA Bank, and The HSA Authority–also dont charge maintenance fees, but they still have a few additional fees such as paper statements, account closings, and excess contributions. Additional fees are typically infrequent or avoidable, so they dont affect our assessments. Still, spenders should be aware of them. The table below shows the full list of rankings for HSAs as spending accounts.
Health Savings Accounts Offer Tax
Whatever you dont spend in your HSA account can simply be carried forward and invested in much the same way as an IRA. You can hold the funds in safe, interest-bearing bank accounts, or with investment platforms that allow you to either invest in mutual funds or engage in self-directed investing in just about any asset classes you want.
Since the investment income is tax-sheltered, it can build up just like a retirement account. And whatever you dont spend out of the account between now and retirement can help provide for you in your old age.
If you dont have an HSA account right now, theres no time like the present to take advantage of this major benefit thats available to anyone with an HDHP insurance plan. Its just a matter of selecting the best places to open an HSA. Use this guide as a starting point and make it happen.
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What Benefits Are There To Having An Hsa
One of the main benefits of having an HSA is that you can use pre-tax dollars to pay for qualifying medical and dental expenses. This means youll be reducing your taxable income and saving for medical expenses at the same time.
However, not everyone has medical expenses each year. This leads to the other benefit of having an HSA: saving for retirement. Many people use their health savings account as a way to pad their retirement savings balance.
This works because youll often have medical needs in retirement and the HSA can cover those. Since HSA funds carry over from year to year, you can invest money in your HSA now and not use it for many decades.
So, you can use your HSA as a savings vehicle to cover short-term medical expenses, and you can use your HSA as an investment vehicle to help secure you financially for your retirement years.
Bonus: If you want to use your HSA funds for non-medical expenses, you can do so. If you withdraw the funds before you turn 65, youll face a 20% penalty and have to pay taxes on the income. Its a painful rate but the funds are accessible.
If you withdraw HSA funds for non-medical expenses after age 65, there is no penalty however, you will still have to claim the money as income.
If you do use the money for qualified medical expenses, your withdrawals are tax-free.
The Best Hsa Accounts Of 2022
- Best for HSA Investment Options: Fidelity
- Best for Employers: HealthEquity
- Best for HSA Management: Optum Bank
- Best for Ongoing HSA Education: HSA Authority
- Best Traditional Bank Option: Bank of America
Lively is the best overall HSA account because of its straightforward zero fees for individuals, highly rated customer service, and vast array of investment options. Livelys setup process is easy and quick. You can get started without any paperwork by linking your bank account, and Lively will help you set up either recurring contributions or an initial one-time contribution.
Lively is also a great option for employers, with a $2.95 monthly charge for every employee who signs up for an HSA account. This can be a great benefit for small businesses where low-deductible healthcare plans can be costly for employees. Lively allows you to sync with your payroll and provides options for centrally managing contributions and enrollments.
Livelys investment options are great whether youre signing up as an individual or an employee accessing the account through your employer. You can invest your funds through a self-directed brokerage account at TD Ameritrade, which is free to access, or take advantage of a guided portfolio from Devenir, which carries a 0.50% annual fee of the total amount it manages. There are no cash balance minimums required for either option.
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Best Hsa Accounts For 2021 By Fees Features And Investment Options
- IBD STAFF
- 07:00 PM ET 02/12/2021
Health savings accounts provide a way for people with high-deductible health plans to plan for out-of-pocket expenses. You can set aside pretax funds, use the money to pay medical bills and even invest the balance in your account. And you can pick from numerous account administrators, whether or not your employer offers an HSA plan. So you want to focus on the best HSA accounts.
Where to start your search? IBD editors have identified 12 Best HSAs based on account features, customer reviews, benefit consultants’ input and Morningstar fund ratings.
The HSA providers are listed by total accounts. We didn’t give an overall ranking, but we named which Best HSAs were Category Award winners in four areas: Investment Quality, Investment Options, Low Fees and Interest Rates. Click on the names below for details on that HSA company, or use the bar at the bottom to scroll through the carousel with all 12.
| Interest rateUp to 0.01% based on balance tier. |
Best HSA Accounts Licensing: The 2021 Best HSAs logo and accolade are available for licensing through Investor’s Business Daily’s partner, The YGS Group, at or 800-290-5460.
Health Savings Account Faq
Chadwickowner of his own investment advisor firm in Unionville, Conn. You only want to invest the part of your HSA balance that exceeds your health insurance deductible, in case you have a big medical expense one year.
Plan not to touch any balance you invest for as long as you can. For more details on this topic, read How to Use Your HSA bmw performance parts los angeles Retirement.
The types of investments that are good for your HSA “depend on your investment sophistication and risk tolerance,” Chadwick says. Treasuriesand other blue-chip choices. Investment costs such as Fund expense ratios and other investment costs are key because they can cut into your long-term returns.
Choose an HSA administrator that offers these options and maybe more, in case you want to change your investment strategy later. Similar to FDIC insurance, make sure the investment accounts are SIPC insuredmeaning that if the hsa investment options bank of america goes bankrupt, you can recoup your funds up to a certain amount.
And of course, the custodian should provide an easy-to-use website and basic account protections like FDIC or SIPC insurance. Online tools such as HSA Search can help you get started. Dictionary Term Of The Day.
A measure of what it costs an investment company to operate a mutual fund.
Financial Journalist Stacey Tisdale Discusses Smart Ways To Invest Your Money & More
Bank of America – HSA Search
A period of time in which all factors of production and costs are variable.
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Can I Use My Hsa Funds For Non
A word of warning: any payments made from your HSA must be limited to qualified medical expenses.
If funds are disbursed for any other purpose, that payment will be fully taxable and subject to an early withdrawal penalty. For example, if you use your HSA debit card to pay for a prescription, then include other non-medical purchases or take cash back, the payment over and above the cost of the prescription itself will be taxable.
Starship Best For Investing
Starship is a health savings account you can set up in just a few minutes that offers simple, integrated investing, right from within the app. In just a few easy steps, you can begin investing your HSA, and even set it on on auto-pilot, letting Starships unique robo-advisor system do the leg work. And with interest rates at all-time lows , having this automated investing component is huge.
On top of their super savvy investing option, Starship also offers its users their beautiful Starship Visa® Debit Card.
Other information about Starship HSAs includes.
- Monthly Cost: None
- FDIC Insured: Yes
- Debit Card: Yes, Free
You can open your account online. Additionally, you can make one-time deposits or automatic deposits online or make them in person at any Old National Bank location.
Note: Morningstar recommended The HSA Authority for investing your HSA too. While they do offer great terms on their investing HSA accounts, they do charge a $3 per month fee.
The set fee means you wont pay more just because youve saved more.
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Through Your Employer And On Your Own
If you have a High Deductible Health Plan through your employer, your employer may already set up a linked HSA for you at a chosen provider. Your employer may be contributing an amount on your behalf there. Your payroll contributions also go into that account. Your employer may be paying the fees for you on that HSA. You save Social Security and Medicare taxes when you contribute to the HSA through payroll.
That doesnt stop you from having another HSA on your own. You can have two HSAs at the same time. The investment options in the HSA chosen by your employer may not be as good as those in a Fidelity HSA. After the contributions are made to the HSA chosen by your employer, you can move the money to your own HSA for better investment options. You can keep the existing HSA open to accept additional contributions. When you leave the employer or when you no longer have an HDHP, you can close the existing HSA and consolidate into your own HSA.
If you get health insurance outside an employer, you are on your own. The insurance company may offer an HSA but you are free to choose your own provider. You get the tax deduction on your tax return.
