How To Invest Fidelity Hsa


Core Positions For A Fidelity Hsa

How to Invest Your Employer-Sponsored HSA with Fidelity

Opening a Fidelity account automatically establishes a core position which is needed for processing cash transactions such as deposits and withdrawals in and out of your account. Think of it like a wallet that you can access for trading, investing, or withdrawals. A benefit of the core position is that it allows you to earn interest or a yield, depending on which core option you choose.

What are the options for my core position?

When you open a new Fidelity HSA®, we automatically put your uninvested cash into the Fidelity® Government Cash Reserves but you can also choose another cash option. Understanding the differences between your core options can help you make the choice that’s right for you. Below are the HSA core options available to you:

What Is An Hsa

For 2022, the IRS defines HSA-eligible plans as high-deductible health plans with a deductible of at least $1,400 for an individual and $2,800 for families. These health plans must also have an annual out-of-pocket maximum spending amount of no more than $7,050 for an individual and $14,100 for families.2

High-deductible health plans could be compelling to those with minimal health expenses. Typically with a high-deductible plan your insurance premium is lower. You could look at it as instead of paying the insurer every month, you are paying yourself by contributing money to your HSA.

Investing In Your Hsa

If you invest the money in your HSA, you are putting your money in a position where it can potentially grow. How much to invest and how to invest depends on your personal situation, considering your goals, time horizon, financial situation, and risk tolerance. To learn more about investing in your HSA, read Viewpoints on Ways to invest in your health savings account.

It may seem odd to start planning for medical costs when you are young and may not have had many health-related costs. Even though your healthcare costs may be low today, they are likely to be higher when you are older. And the possible tax advantages of an HSA make it more than just a way to pay for qualified medical expensesit is also a vehicle to save for retirement in general.

If you choose to use Fidelity for your HSA, you can choose to actively manage your HSA investments in an HSA brokerage account, or you can work with a financial advisor to learn more about HSA investing with Fidelity.

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# 10 Hsa Administrators

fidelity hsa debit card

I love how HSA Administrators is always open about fees and investments. It was a hard decision between HSA Bank and HSA Administrators years ago when I had to decide. Back then, the fees at HSA Administrators were slightly higher, and that’s why I’m at HSA Bank. Currently, their fees are $45 plus a 0.25% AUM fee. That’s it. But in my case, with a $60K balance, that AUM fee is $150 and growing. So a grand total of $205 per year, almost three times the price of HSA Bank. Hard to get excited about that. The investments, however, are easy to get excited about. Vanguard admiral share index mutual funds plus some DFA funds for those who are into that sort of thing. But overall, it’s cheaper for me to just buy the Vanguard ETFs at HSA Bank than pay the HSA Administrators AUM fee. However, if you were doing a lot of transactions every year, and had a much smaller HSA balance than I do, I could see where someone would choose HSA Administrators.

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Take Advantage Of The Triple Tax Benefit

Once you start investing through your HSA, you can begin reaping the rewards one of the biggest being the triple tax benefit, Medina said.

Another cool trick is that the accounts are triple tax-advantaged, which means contributions are tax-deductible, growth is tax-free and the distributions are tax-free when used for qualified medical expenses. In addition, unlike a 401 or IRA, you dont have to deduct money from the account at a certain age.

If youre investing over the long term in your HSA, that tax-free growth can make a significant difference in the amount of money you keep.

Investing Through An Hsa

Think of your HSA as a home for your medical money. Just like a brokerage account or an IRA, youll need to put money into the account before you buy investments. Then, after you fund the account, you can start investing.

Some HSAs offer tools that help you choose your investments and provide automatic rebalancing, so your portfolio stays within your preferred allocation. Others allow you to select from specific investments, such as stocks, bonds, mutual funds and ETFs.

Whatever method you choose, investing your money through an HSA will likely allow it to grow faster than by saving alone. However, if your HSA is offered through an employer, you may have fewer options for how you can invest your money.

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Can You Invest Your Hsa Money

Many HSA administrators require a minimum balance in your account before allowing you to invest, so it’s possible you cannot. Check with your HSA administrator to find out if there’s a minimum balance required for your HSA before you can invest. Keep in mind, though, that just because you can invest your HSA money doesn’t mean that you necessarily should.

Best For No Fees: Lively



Lively doesn’t charge any fees to open or maintain a health savings account, and that includes no hidden fees. If you want an account where fees wont eat away at your savings, then Lively is a solid option to consider.

  • No fees for their HSAs

  • Open and fund your account with ease and entirely online

  • Invest your HSA funds with TD Ameritrade

  • Lively offers a mobile app that lets you track your HSA funds on the go

  • Get a free debit card you can use to pay medical bills

  • Only one of Livelys two investment solutions is freethe other has a 0.50% annual fee

  • It’s a new company with only a few years of experience

Lively was just founded in 2016, so this HSA provider hasnt been around that long. However, we chose Lively as best for no fees based on the fact that their HSAs dont come with any account opening fees, maintenance fees, fund transfer fees, debit card fees, or hidden fees of any kind. Lively also gives you a debit card that is connected to your account, which lets you pay for medical expenses over the phone or in an office with the money being automatically debited from your HSA.

Lively is fully online and they also offer a mobile app that can help you track your HSA funds using your favorite device. You can also use the app to monitor your healthcare payments and keep track of your health insurance deductible. Lively also offers paperless account rollovers and trustee-to-trustee transfers of funds.

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How Does An Hsa Differ From A Flexible Spending Account

HSA funds are owned by the account holders, so they roll over from one year to the next and never expire. This makes them markedly different from flexible spending accounts , which are often offered through employers.

Generally speaking, a flexible spending account is a savings account that lets employees contribute a portion of their earnings to pay for medical expenses and dental bills. FSA contributions are also tax-advantaged, meaning they are deducted from the users taxable income. If an employee doesnt use the money in their FSA by the end of the plan year, their account balance will disappear unless their employer offers a grace period of up to two-and-a-half months.

Opening Your Fidelity Hsa

You may enroll in the HSA at any time if you are enrolled in the BU Health Savings Plan. This is the process to follow to establish your account:

  • You may enroll via Employee Self Service.
  • Once you have submitted your enrollment, your payroll contributions will be set up.
  • Fidelity Investments will be informed by Human Resources that you have enrolled and are eligible to open your Fidelity HSA.
  • Fidelity will contact you via email or telephone with instructions to set up your account through NetBenefits.
  • Once you have completed the account set up, payroll deductions will begin and your pre-tax contributions will be sent to Fidelity.
  • After your first contribution, BU will contribute $500 for individual coverage and $1,000 for any family plan. Any money in your HSA is immediately available for you to use for qualified medical expenses.
  • Your Fidelity HSA Investments

    The Fidelity HSA is a Fidelity brokerage account that has a core position through which all contributions are deposited and all disbursements are withdrawn. This core position is an FDIC-Insured Deposit Sweep. Once your account balance exceeds $2,500, you can choose to invest in a broad range of options, including a full range of Fidelity mutual funds, more than 4,000 non-Fidelity funds, and individual stocks and bonds. Any earnings on your Fidelity HSA investments are automatically reinvested and grow tax free.

    Funding Your HSA

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    % Of People With Health Savings Accounts Make This Mistake

    • Just 9% of health savings account owners invest a portion of their funds, according to the Employee Benefit Research Institute. The rest, 91%, hold cash.
    • Ideally, savers would treat HSAs like a retirement account, by investing for future health costs in old age.
    • However, HSA investing may not be available to everyone. Doing so would mean paying out of pocket for short-term health expenses to let money grow.

    The vast majority of health savings account owners aren’t investing their money and it’s likely shortchanging them over the long term.

    Just 9% of accountholders were investing a portion of their HSA balance in 2020, according to an Employee Benefit Research Institute study published Thursday. The remainder 91% held their full balance in cash.

    HSA owners can invest money in mutual funds and other options that are generally available to retirement savers.

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    The low share of invested accounts is alarming, as it indicates many people aren’t taking full advantage of HSAs, according to Paul Fronstin, director of EBRI’s health research and education program. Some may have valid reasons for not doing so, though, he said.

    “For the same reason you’re hopefully investing your 401 in mutual funds, you can do the same thing in your HSA,” Fronstin said.

    Best For Employers: Further

    Which is the Best HSA? Fidelity vs Lively Review

    Further is the best HSA provider for employers based on the selection of accounts they help manage. Business owners, including owners of small firms, can turn to Further for help overseeing employer health savings accounts, flexible spending accounts, transportation reimbursement accounts , dependent care assistance programs , and more.

    • Oversee several different employee reimbursement accounts and savings accounts in one place

    • Employees can grow their balance with interest rates as high as 0.70%

    • Investment options available with Charles Schwab once an account balance grows to $1,000 or more

    • Investment options have underlying fees that vary

    • Further charges an additional $18 per year for investment accounts

    • Further charges varying fees to employers who open accounts for their workers, and you have to call in for pricing

    Further was founded in 1989 with the goal of streamlining the healthcare payment process. And while you can sign up for an individual or family HSA with Further, this provider stands out due to their wealth of healthcare account management options offered to employers.

    Note that Further HSAs can earn a variable interest rate based on market conditions, but that employees can invest their funds with Charles Schwab once they have at least $1,000 in their HSA. An annual fee of $18 is required for investment accounts with Charles Schwab, and included investments come with their own fees that vary.

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    What Are Your Hsa Investment Options

    You’ll need to check with your HSA administrator to find out the specific investment options available in your HSA. However, common HSA investment options include:

    • Can be less risky and less volatile than other investment options
    • Interest rates typically higher than bank savings account rates
    • Typically underperform stocks over the long run
    • Risk of issuers defaulting on interest and principal repayment

    Fidelity Hsa Vs Lively Hsa

    Miranda Marquit |

    Modified date: Oct. 26, 2021

    Editor’s note –

    A Health Savings Account can provide you with a tax-advantaged way to save for healthcare costs. You can use your HSA funds immediately or save them for future use since the money rolls over year-to-year.

    There are different accounts available, and this article will take a look at the Fidelity HSA vs Lively HSA so you can get an idea if one might be right for you.

    $0, but some funds might have a minimum $0
    Proprietary funds aimed at HSA investing, help for healthcare and retirement planning Linked to TD Ameritrade self-directed investment account
    Best for Full-service experience and help choosing investments Simple online management and self-directed investing

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    How We Make Money

    We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

    Fidelity Health Savings Funds Designed To Help Investors Save For Health Care Expenses

    Health Savings Accounts: What You Need To Know About HSA Investments, Contributions

    Transferring hsa funds is pretty simple. Select fdic or fidelity government cash reserves , then click preview order, and submit. switching is free and will not change your ability to access or invest this money. A new request will need to be submitted each time you wish to transfer hsa assets to fidelity.

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    Hsa Tips: Investments For A Health Savings Account

    If you don’t mind volatility, feel free to pick an inexpensive S& P 500 Index fund. You can complement that with index funds that track whatever other parts of the market you want for the sake of diversification, from small-cap stocks to bonds.

    For a smoother ride, check out funds that own bonds as well as stocks. Fidelity offers mutual funds specifically for HSAs. Both had more than half of their shareholders’ money at work in bonds as of Oct. 31.

    Why Should You Invest Your Hsa Money

    HSAs were established primarily for individuals to use to pay for their health expenses. But they can also serve as excellent retirement savings accounts with important benefits. Arguably the biggest upside for HSAs is that they offer a triple tax advantage:

  • You don’t have to pay federal income tax on your contributions.
  • You won’t be taxed on withdrawals for qualified medical expenses.
  • Your earnings from investments won’t be taxed.
  • You benefit from the first two tax advantages even if you don’t invest your HSA money. However, if you do invest your HSA money, the third advantage helps you as well.

    There is a caveat to this advantage, though. If you withdraw HSA earnings before you turn 65 for reasons other than qualifying medical expenses, you’ll be taxed at your ordinary income tax rate. You could also incur an additional 20% tax penalty on HSA distributions for nonqualified reasons.

    Investing HSA money could be an especially attractive option for some. If you have maxed out your other tax-protected retirement savings account contributions and still have additional money to invest for retirement, HSAs provide a great way to boost your overall retirement savings.

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    Why Shouldn’t You Invest Your Hsa Money

    The biggest drawback to HSAs is that they must be tied to a high-deductible health plan. These plans require you to spend relatively high amounts out of your own pocket on deductibles before your health insurance will provide any reimbursements. High-deductible health plans aren’t ideally suited for those with high medical expenses.

    It’s possible that your medical expenses weren’t very high when you initially opened your HSA but that those expenses later increased. If you suspect there’s a good chance you will incur significant medical expenses in the near future, you’ll want to make sure you have enough money in your HSA to pay those expenses.

    Additionally, some HSAs might not offer the investment options you prefer. Others could charge fees that are higher than you’d like for choosing to invest your HSA money.

    Best Investment Options: Fidelity

    Which is the Best HSA? Fidelity vs Lively Review

    Fidelity allows you to invest your HSA money into Fidelity mutual funds and index funds. Fidelity even offers a handful of fund options that are only available to clients with a Fidelity HSA, including Fidelity Health Savings Fund and Fidelity Health Savings Index Fund .

    • Invest your HSA into high-quality, low-cost Fidelity mutual funds and index funds

    • No account minimums or account management fees

    • Receive a debit card you can use to pay for eligible healthcare expenses

    • Underlying fund expenses apply when you invest your HSA money, and these vary

    • Some Fidelity HSA investment options come with expense ratios as high as 1.03%

    If youre looking for an HSA provider who has been around for a while, you might be interested to know that Fidelity was founded in 1946. However, we chose Fidelity for our ranking not for their longevity, but based on the fact you can invest your HSA funds in so many low-cost options aimed at long-term growth.

    Fidelity even offers two funds specifically for their HSA members, including Fidelity Health Savings Fund and Fidelity Health Savings Index Fund . FHSNX, in particular, has an expense ratio of just 0.24%, which makes it an affordable option for long-term investors who want to grow their HSA balances over time. Plus, Fidelity lets you choose from other investments laid out on their website, including dozens of funds from Fidelity, JP Morgan, Wells Fargo, T. Rowe Price, and others.

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