Best HSA Provider for Investing HSA Money

Health Care Costs

[Last updated on July 27, 2016. Older comments are for the previous versions of this article first published in 2011.]

When I first started my Health Savings Account (HSA), I decided to just use the savings account at Alliant Credit Union. At that time Alliant Credit Union’s HSA was paying 2% interest, which was comparable to the yield on a short-term bond fund. Because money is fungible, I just moved some money from short-term bonds to stocks elsewhere in my investment portfolio. That was as if I invested my 100% of my HSA in stocks.

As time passed, the interest rate on Alliant Credit Union’s HSA dropped from 2% to 1.25%, then to 0.65%. My HSA balance also grew. Now it’s time to look again.

HSA Bank

HSA Bank is a popular HSA provider. If you keep $5,000 in cash earning 0.3%, you get the maintenance fees waived and you can invest the rest of your money at TD Ameritrade. If you want to invest the whole thing, you pay $66 a year in maintenance fees.

That’s not too bad.

Elements Financial

Elements Financial, formerly Eli Lilly Federal Credit Union (Elfcu), offers a similar setup with TD Ameritrade as HSA Bank. You don’t have to work for Eli Lilly. You can join Elements Financial by making a one-time $5 donation to a non-profit organization called Tru Direction.

Elements requires $2,500 in the savings account earning 0.5%; or else you will charged a $3 monthly fee. You can transfer the rest to TD Ameritrade; each transfer costs $25. TD Ameritrade doesn’t charge any maintenance fee (a disclosure document shows $12.50 per quarter maintenance fee but it doesn’t apply under the Elements contract). You can invest in anything normally available through TD Ameritrade at its normal commission schedule. Take a look at 101 commission-free ETFs, 32 of which are from Vanguard.

Because Elements charges $25 for each transfer to TD Ameritrade, it’s better to limit such transfers to no more than once a year.

For a complete walk-through of setting up the HSA at Elements Financial, see Setting Up HSA at Elements Financial.

Saturna Brokerage Services

Saturna Brokerage Services offers an HSA in a brokerage account. You can buy pretty much any mutual fund or ETF for $15 a trade online, including Fidelity index funds. Vanguard mutual funds cost $10 extra. If you contribute the maximum once a year and do one trade, you only pay $15 or $25.

See this review on the Bogleheads forum for more details.

Saturna Brokerage Services is the best HSA provider for investing HSA money if you can limit yourself to one trade per year. If you trade more frequently, consider either HSA Bank or Elements Financial.

Transfer or Rollover

If you are interested in moving your existing HSA to any of these three providers, you can do it either as a transfer or as a rollover.

A transfer doesn’t pass through you. There is no frequency limit on transfers. Your current provider may charge you a fee for the outgoing transfer or account closure. Not all HSA providers charge; Elements Financial doesn’t.

If your current provider charges a fee for the transfer and you want to avoid it, you can do a rollover yourself, but you can only do it once per rolling one-year period (not calendar year). See How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee.

[Photo credit: Flickr user 401(K) 2013]

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  1. Money Beagle says

    I’ll have to check that out. I pretty much refuse to pay an annual or monthly fee for an HSA account (it’s akin to paying a monthly fee for my checking account), so I was planning on using my credit union. I think they offered a no-charge option but I’m not sure what the interest rate they paid (if any) was. I don’t think our balance will be that high since we’re planning on just starting off next year, so it might not even be worth it to use Alliant just yet. But, I will make sure to run the numbers, because that’s pretty sweet!

  2. nickel says

    Be aware that if you have the option for payroll deduction directly into your employers custodian of choice, you get the tax deduction plus you avoid FICA taxes. If you instead opt to make the contributions to another custodian yourself, you still get the tax deduction, but you don’t get out of the FICA taxes. Something to keep in mind…

    • Andrew says

      My employer set up accounts for us at Bank of America, but I opened an account for myself at HSA Administrators and got my employer to change the direct deposit info (routing/transit and account #). It worked, though it did require some communication with the new custodian. And I still avoid FICA. The main downside is that my employer isn’t paying the fees on my account, but you can’t have everything.

  3. KD says

    What is opportunity cost of having higher annual deductible and out-of-pocket maximum at hand if needed?

    More importantly, are the coverages same between two plans esp. for high dollar prescriptions, treatments, co-insurance etc? I tried to compare that on and PPO won in instances I checked but the premiums were higher.

    I am also queasy about conflating investments and HSA money by saying money is fungible. I don’t think it is that simple. HSA money covers healthcare cost risk. Investments cover different and less critical risk in my opinion.

  4. Harry Sit says

    @nickel – Thank you for your comments on saving FICA taxes if you use payroll deduction. If you earn more than the Social Security wage base ($110k in 2012), the FICA savings is 1.45% of your HSA contribution. If you earn less, the FICA savings is 7.65% of your HSA contribution.

    @KD – The risk on higher annual deductible and higher out-of-pocket maximum comes from the HDHP, not HSA itself, although you can’t have a HSA if you don’t choose HDHP. The HDHP only makes sense if you are healthy. Of course being healthy doesn’t eliminate the risk. You don’t take the HDHP for the sake of having a HSA. You take the HDHP because you want to save on premiums, in the same way as choosing a higher deductible on car insurance or home insurance. You are hoping over the long term the premium savings will be more than the occasional unexpected expenses. This post is conditioned on having already decided to go with a HDHP.

  5. KD says

    OK, got it. As you know healthcare costs are increasing faster than inflation and most likely even faster than most investment returns. In this scenario won’t the risk of increasing healthcare cost diminish the benefit of lower premiums over the longer run. For example, a certain treatment cost $200 today but but due to cost increase costs $350 in a few years. The proportional premium increase may be somewhat lesser due to shared costs – or may be not. Also the risk for out of pocket expenses increases the fastest with HDHP (The probability that you may have to incur those expenses as you age and the hole they will burn in your pocket – larger and faster – shielded by HSA but not really if healthcare costs grow fast). May be I am not viewing this correctly so please correct as necessary. I am trying to understand the nexus of health risk, healthcare cost risk and benefit of lower premiums and HSA. I wish there was a simple algebraic equation to state it. Also if you are healthy then all of this becomes moot.

  6. MC says

    If you are in California, one of the few states that does not recognize HSAs, the only way to preserve full tax deferral of HSA accounts is to invest in treasury bills, notes, and bonds. HSA Bank (through TD Ameritrade) provides one way to do that.

  7. Thooda says

    I’ve had HSA since 2007 and my Alliant HSA since 2009. I contribute via payroll direct deposit.once a year I do custodian to custodian transfer from alliant to HSA administrators. Been doing this for last couple years.

    • Andrew says

      You might ask your payroll folks to change the direct deposit info to your HSA Administrators account (I did this).

  8. Dan says

    A very useful article, TFB. I’ve thought about maxing out my HSA to get a bit more tax-advantaged space for investments, but with such high fees it seemed pointless.

    Why does Vanguard only offer its funds through HSA Administrators, rather that offering such accounts itself? With the fees, I’d effectively be paying an 3% in expenses for the first year, and at least .32% on an ongoing basis. Vanguard funds are a whole lot less appealing with such high expenses…

    Alliant CU does seem like a viable option in terms of paying a decent rate comparable to short-term bonds. Is this the highest interest rate available for an HSA currently?

    Is it possible to rollover one HSA into another as often as desired? I’d want to make contributions directly to my employer’s chosen custodian, in order to get the FICA benefit, and then transfer them to something higher-yielding.

  9. Chris says

    “The HDHP only makes sense if you are healthy. ”

    Arguably, it also makes sense for those who may be very sick and/or have extremely high medical costs, as long as the HDHP has a true maximum out-of-pocket ceiling.

    It seems not to work as well for those “in the middle,” who have middling annual health care costs. (But each person has to run the numbers for their individual HDHP to be sure.)

  10. Harry Sit says

    @Dan – I’m guessing Vanguard doesn’t want to perform the administrative chores associated with HSAs. It does for IRAs but the IRA market is magnitudes larger. Adirondack Trust Company, a bank in upstate New York, pays 3% on a HSA, but it charges a $25 setup fee and a $4 monthly fee. Ignoring the one-time setup fee, you will have to have more than $5,000 in the account to beat the 2% from Alliant CU. Besides the convenience factor because I’m already a member of Alliant CU, I trust Alliant CU to remain competitive more than Adirondack Trust Company.

    You can do a trustee-to-trustee transfer at any time but the outgoing account may charge you a transfer fee. You are allowed to do a rollover yourself once a year – write a check from one account and deposit it in another within 60 days.

  11. nickel says

    We’re currently paid a pittance on our HSA balance, but it will go to 2.25% once our balance reaches $15k — assuming they don’t pull the rug out from under us at that point.

    In the mean time, I need to keep the employer account open (and contribute to it) to capture my employer’s match. And I need to keep at least a $3k minimum balance (earning close to 0%) in order to avoid the monthly fees ($3-$4/month).

    So I can just let the money sit there and earn nearly nothing, but not incur fees, or I could move some or all of it to another provider. If I leave $3k behind to avoid fees and move the rest, then I’ll have $3k earning nothing, which is equivalent to a $30-$60 annual fee (assuming I could earn 1-2% elsewhere).

    Once at a new provider, I could either earn a savings-like interest rate, or I could branch out into mutual funds or ETFs. However, many places have a cash balance minimum to avoid fees even if you have a large balance through their investing platform, which could mean another $3k or so sitting idle and earning very little.

    I could rate chase with Adirondack or Alliant, but it’s a lot of work, and I don’t trust that they’ll keep their rates high.

    This is almost enough to make me just start drawing down my HSA balance and using it to pay for ongoing medical expenses rather than holding the cash back and building up an extra tax-advantaged investment account.

    In the short term, we will likely leave it in place. We should reach $15k sometime in the coming year (we’ve contributed the family max of $6k-ish during the past two years, and will do so again this year). At that point, if the bank doesn’t screw us*, we’ll be making 2.25% which isn’t bad at all given the current rate environment.

    In the long run, if our employer stops matching funds, I’m not sure what we’ll do. That FICA avoidance, even at just the medicare rate (good point on that, btw), is around $90/year — but that may wind up being a small price to pay in return for simplicity.

    *I have a sneaking suspicion that they will screw us, however. The HSA has only been an option for us the past two years, so it’s impossible for anyone at our workplace to have reached $15k. Thus, that 2.25% is a nice, but purely theoretical, carrot. Once people get there, I can easily imagine the bank re-working their rate table.

  12. Sher says

    Nickel, you might be onto something here. This seems to be one of the oldest tricks in the book.

    Take your cash now (fees), in small amounts, but regularly, each month. Then promise you rewards (always in the future), which they reserve the right to remove at pretty much any time.

    Who knows maybe the economy will improve and you’ll get your 2.25% then…

    How are your investment options, btw. I found these mostly lacking with the HSAs.

  13. nickel says

    The investment options from my employer’s custodian are abysmal. 5% loads and 2%+ expense ratios. Absolutely horrible.

  14. Dan says

    Nickel, I have the same problem as you. My employer’s custodian offers abysmal investment options and/or very low interest rates for HSAs. At least there’s no monthly maintenance fee.

    I’d like to max out my HSA, since it’s a great new source of tax-advantaged space for retirement. But it seems that those of us who are “early adopters” are betting on the appearance of low-cost investment options for HSAs in the near future. As Sher suggests, this is kind of a gamble… current HSA custodians could crank up the fees even further and there’d be no decent place to put the money until someone like Vanguard enters the market directly.

    TFB’s 2% rate from Alliant seems decent, and I think a not-for-profit credit union is less likely to screw its customers than a bank. I’m thinking of opening an account just for this reason.

  15. Cleotus says

    I’ve had my HSA at HSA Bank since 2008. I have all of my HSA funds at TD Ameritrade. Until a couple months ago the annual fees were only $27 per year; they are now $66 per year (assuming you have all of the funds at TD Ameritrade)

    I have an approach that has not been mentioned yet. Note: I plan on contributing the maximum each year and never withdrawing a dime until age 65.

    My understanding is at age 65 the HSA turns into both a traditional IRA as well as maintaining it’s HSA status.

    So, even in retirement I can withdraw money for qualified healthcare expenses and not pay taxes or I can withdraw money to be used for non-healthcare uses and pay my marginal tax rate.

    Considering this, I have my asset allocation somewhat mirror my overall portfolio. I do this because I see this money as having an exclusive use that none of my other retirement money possesses – I can use it tax-free for medical expenses from age 65 until my death.

    With TD Ameritrade’s no-commission ETFs (many Vanguard) I have built a garden-variety diversified portfolio a la Fama/French but with a bit of a Swedroe influence as well as value tilt (for instance VIG + VYM & VBR rather than VTI, since I do not pay taxes on the dividends now among other reasons)

    Regardless of my asset allocation — is my reasoning sound? Treating this as separate from everything else in my portfolio? If I keep only treasuries in my HSA or keep my HSA money in a savings account I am nearly certain that I will end up with a lower balance at age 65 (just over 25 years from now for me) than if I invest in a diversified portfolio of stocks/bonds.

    Thanks to TFB for discussing this important topic.

    • Josh says

      I am doing the same, great plan and makes a lot of sense. I’m tracking all my current medical expenses that I’m not withdrawing funds from currently. I have 21k in the HSA account and around 6k in expenses I haven’t reimbursed yet. Just make sure you keep all your records for when you do finally pull out the funds to reimburse for your expenses.

  16. White Coat Investor says

    Great article. I learned two things from it I didn’t know before:

    1) You can withdraw HSA money later (2 decades from now) using receipts from now (right?)

    2) Alliant 2% HSA/short term bond trick. That’s more than the G fund is paying right now.

  17. dd says

    TFB, thanks for writing about Alliant Credit Union. I took a look at the website and opened two accounts at Alliant yesterday.

  18. Rabbmd says

    My s corp uses a broker for health insurance. We currently pay $100 a month for all 14 employees to have a hsabank hsa or hra. I have to hsa, and all fees are waived as a result. I use both alliant credit union and td ameriteade for my hsa. Since my wife and i are relatively healthy, and have had an hsa for years, we have like $8000 in alliant and $12,000 in td vanguard etfs/funds. I can not use the cafeteria option as i am an s corp owner, however maybe people could look into getting a broker to use hsabank. This might eliminate a lot of the fees people face.

  19. Harry Sit says

    @Rabbmd – HSA Bank isn’t charging you fees because it’s paid by the insurance company. You are still paying the fee, perhaps both for you and your employees, through the insurance premium.

  20. Dan says

    TFB, thanks for the excellent article.

    One small point about HSA Administrators: they waive the setup fee if you transfer funds (any amount, seemingly) from your current custodian. And they list an annual fee of only $36 on that form too:

    With an annual fee of $36 + 0.32%, I’d effectively be paying 1.52% of the $3,000 I’ve got in my HSA, though that’ll be down to about 0.9% after another year’s worth of contributions. I’m still trying to decide if it’s worth it for me to pay these steep expenses or just leave the money in my employer’s default Chase HSA (0.40% APY) until I’ve got a bigger chunk of money in the HSA to invest.

  21. Brendan says

    I’m a little unclear on the mechanics of the FICA benefit people are talking about. I make a small contribution from my paycheck each month (about $160) and then make a roughly $2000 lump sum contribution at year end. I could break the $2000 lump sum into monthly contributions that get deducted from my pay, but don’t I get the same reduction in FICA taxes when I complete my tax return for the year. Making the contribution at year end gets reported on my tax return and I get a larger refund. I understand I lose some time value of money with this approach, but doesn’t the FICA issue become a wash?

  22. Harry Sit says

    @Brendan – FICA is Social Security and Medicare taxes. If you are not making your $2000 lump sum contribution through payroll, you are not getting a deduction on FICA. Putting it on the tax return on your own gets you a deduction for federal income tax, and state income tax in most states, but not Social Security and Medicare taxes. If you are making your $2000 lump sum contribution through payroll, then it doesn’t matter whether you do it monthly or at the end of the year.

  23. Rick Van Ness says

    Update: Alliant interest rate has fallen to 1.25% for HSA but I’m choosing to go with them. Thank you for your informative and helpful article.

    I don’t believe it is possible for them to automatically make your donation to Foster Care To Success with either the online or the paper application. You do this separately. I applied to Alliant online. When you get to the page Tell Us About Yourself, select “I below to the following association or organization” and a pop-up box will appear where you then select Foster Care To Success. They generate an interesting set of questions to authenticate your identity. In my case, one of my questions asked me to recognize a phone number from too many years ago (multiple choice) and I failed to get approved immediately. However, after the weekend they sent me an email that I have been approved—so, in the end, it was a piece of cake after all. Thanks again for the helpful article.

  24. Heidi says

    I moved my HSA funds to Connexus Credit Union . There’s no set up fee, no monthly fee, and it’s currently paying 2%. If you don’t meet their criteria for membership, you can simply make a one-time donation of $5 to join the Connexus Association and you become a member.

  25. D00D says

    Are they still making the donation or the minimum deposit for new members? $10 is no biggie but just thought if they are still doing it, it would be nice to take advantage of it.

  26. Erik says

    I just moved from my bank to HSA Bank in October. Immediately after that, I started seeing posts about Eli Lilly Federal Credit Union (Elfcu) on the Bogleheads forum from what I think was a marketing rep of some kind, because I saw the same post in several locations. Anyway, it immediately made me regret going with HSA Bank, but I chalked up the lack of responses to mean that people were skeptical of Elfcu. Now I see this post update… ugh. I should probably do a rollover to Elfcu. It seems to only make sense, since I’m keeping $5,000 at HSA Bank to avoid the fees and investing the rest in VTI, which I could maximize through Elfcu.

    • Erik says

      Note to self and anyone thinking of switching… I’ve already started investing my HSA for 2014 in TD Ameritrade. If you are thinking of switching, there is a 30-day hold period for ETFs to avoid paying short-term trading fees. So in my case, I purchased VTI shares on 1/17/2014, so now I need to wait until roughly 2/17/2014 to sell those and pull the money back into HSA Bank before I rollover to Elfcu. Damn you TFB for making me do this. 😛

  27. Mike says

    Saturna Capital looks like the best deal now. For one trade per year, the cost is only $14.95 and I can invest the whole amount in any ETF or Fidelity/Vanguard mutual fund.

    • Erik says

      After the $5 donation to Elfcu, it doesn’t cost you anything to set up or ongoing. That seems like the best deal.

  28. harry @ 4HWD says

    Thanks for the tip on this deal, I’m going to do some more research but it looks like I might be switching from HSA Bank to Elfcu. I pay for all my HSA expenses with after tax money(via credit card) and save the receipts anyways so I don’t need 5k sitting in cash with HSA Bank. I’d rather invest it all.

  29. OB says

    ELFCU seems to be the best HSA investment deal followed by Saturna. If you choose Saturna’s inhouse mutual funds, you don’t pay any commission or maintenance fees, just the baked in ERs. Hopefully the other financial institutions would take heed and compete by providing more options and lowered fees.

  30. cowboy Mike says

    Thank you for the informative article.

    My wife and I have individual HSAs with HSA Bank via Health Savings Administrators. We have 100% of our money invested in Vanguard Mutual funds because we treat the HSAs as a form of IRA. So in addition to the annual fee we pay the following as well.

    Custodial fee: 0.0008 per quarter times account balance (80 cents per $1000), capped at $20,000 account balance per fund. Mutual Fund Account maintenance fees will be deducted from the account balance each quarter.

    Does Elfcu have fees like these as well or would be saving those fees if we moved to Elfcu?

    Where can I find a list of what Vanguard funds are available via Elfcu?

    Thank you very much for this article.
    Happy trails, cowboy Mike

    • Harry says

      No it doesn’t have asset-based fees as HSA Administrators does. You invest through a linked TD Ameritrade account. It’s best to use commission-free ETFs instead of open-end Vanguard mutual funds. I linked to the list of 101 commission-free ETFs in the article. 32 of the 101 commission-free ETFs are from Vanguard.

    • cowboy Mike says

      Hi Harry,
      Thank you.
      We only invest in index funds. We like to employ the KISS to our retirement investments, our HSAs are currently invested in Vanguard’s LifeStrategy Moderate Growth fund (a fund of index funds) that matches our other overall asset allocation strategy. I just prefer index mutual finds over ETFs.

      Looking at the list of available funds and Vanguard funds we may have to stay put.
      Happy trails, Mike

  31. mwm says

    Be careful with EFLCU, I paid the $5 to the TruDirection “nonprofit” and applied for an HSA account.

    I was emailed later and told I need to show up in Indianapolis with my ID to create an account.

    Seems like a scam to me. 🙁

    • Harry says

      Others appeared to have signed up just fine. Can you send a copy of your ID to them either by mail or electronically? It’s common for banks to require a copy of your ID.

    • mwm says

      The letter I received says: “you would need to appear in person at one of our Eli Lilly Federal Credit Union branch locations and provide current ID”.

      I called and a representative said it had to be in person. I asked if there was any other way such as showing up at another shared CU branch, but was told that wasn’t possible. I asked if they could refund the TruDirection payment and was told they would not.

      Sounded like a great deal, but looks like I’ll be stuck paying $66/yr to HSA Bank. Or, perhaps, Saturna as I’ll probably only make 1-2 Vanguard ETF purchases per year and they’re conveniently located in WA.

  32. Mainer says

    I was all set to jump on board until I read the post by mwm. Any update on whether joining ELFCU is still doable (without having to show up in person w/ID?)

    • Harry says

      Let’s see if others report the same problem. I’m hoping it was an isolated incidence caused by the automated ID verification system not able to verify ID or random selection like getting the SSSS at the airport.

    • Sarah says

      I am interest in ELFCU account, is there anyone else who have issue set up the account without showing up in person in ELFCU branch? I need to make sure it is possible before sign up since I live far from Indianapolis. Thanks,

    • Harry says

      I just signed up online. You give your name, address, date of birth, driver’s license number, etc. (required by law) and you answer some questions based on information in your credit report — identify the places you lived in the past, loans you had, etc. It took about 5 minutes. I got an application confirmation number, and two account numbers — one for member savings, another for the HSA — both showing an “approved” status.

      @mwm – If you are still reading, can you tell us if you also got the application confirmation number and two account numbers? Or were you sent to the physical verification path because the system wasn’t able to match your driver’s license number or date of birth or your answers to those verification questions?

    • Harry says

      I received a welcome email, with the same two account numbers given to me at the end of the online application yesterday. I was able to create a login name and a password. Everything looks good. Next step: mail in the transfer form.

  33. Mainer says

    Would you mind clarifying the steps of joining TruDirection and then joining the credit union: Once you’ve joined TruDirection and paid the $5 fee by credit card (on the TruDirection website), does ELFCU know that you have done so and so are eligible to join the credit union (I assume on the credit union’s website)? Or do you need to let ELFCU know that you are a member of Tru Direction? Thanks.

  34. BN says

    Very interested in transferring my current HSA account with a credit union earning 1.75% APY to Eli Lilly but also need to confirm that everything can be done online before I proceed.

  35. Mainer says

    I applied for credit union membership on-line and received an email requesting a copy of my drivers license and a piece of mail with my current address. I could fax or email this. I faxed it and several days later I received (by email) my acceptance as a member & my account #. Not sure why I had to submit that info but it all worked out. Now I will sign up for the HSA.

  36. Mainer says

    Any advice regarding how to invest an HSA (using the TD Ameritrade VG non-commission ETFs)? If one’s portfolio is essentially 50/50, does it make sense to use the same allocation for one’s HSA money? I thought I’d split between VTI/VXUS/BND (per Allan Roth’s Second Grader Portfolio), but VXUS isn’t available, so just split between VTI and BND? Thanks for any help.

    • Erik says

      My asset allocation is spread across my accounts, so I currently just keep VTI in my HSA through TD Ameritrade. I was recently considering what you mentioned with VTI and BND, but I was going to approximate VXUS with 90% VEU / 10% VSS. Alternatively, you could pay the commission and buy VXUS.

    • Harry says

      I agree with Erik. If your HSA is small relative to your other accounts, which is the case for me, just pick one ETF and balance it out in the other accounts. I will buy just VTI.

  37. Frank says

    Mainer said this: “I applied for credit union membership on-line and received an email requesting a copy of my drivers license and a piece of mail with my current address. I could fax or email this.”

    *** I was turned DOWN!

    I followed their instructions as Mainer described and they said ‘nope’

    Outrageously secretive organization. They would not give any reasoning.

    I think it was because my drivers license was different from my mailing address but they refused to give any information.

    They demanded that I could only physically visit one of their branches…5 states from me! Ridiculous.

    Needless to say I’m very disappointed after reading this article and very suspicious of this company and the staff that works there. They were extremely friendly upon applying but then acted like I had leprosy once I was denied and simply tried to get a reason.

    I have over an 800 credit score and a high net worth with nothing adverse on ANYTHING!

    I guess they don’t want a mid-five figure transfer of my HSA to their account. I guess they don’t like to make money…??

  38. Danny C. says

    For the ELFCU account $2,500 minimum, do you have to maintain $2,500 in the HSA checking account portion and then invest the rest or can you invest everything you have as long as its at least $2,500?

    • Erik says

      You have to open the HSA with at least $2,500, but then you can invest 100% of your HSA in TD Ameritrade, leaving a zero balance if you’d like in the savings account portion.

  39. Angela says

    My question is for anyone who has transferred successfully from HSABank to ELFCU:

    Were you able to transfer your TDAmeritrade ETF holdings “in kind” or did you first have to liquidate them and transfer the $ back into your HSABank cash account?

  40. tim says

    I was also rejected 🙁

    Their phone support won’t provide a reason and they just say you have to visit a branch in Indianapolis. It seems they’re not very interested in signing people up for their HSA account.

  41. Dave says

    As far as ELFCU goes, I was able to open an account without any problems (funded it with my 2013 contribution.) In my case, the driver’s license name and address matched everything on the copy of the bill I sent.

    Seems they need to be careful as to not fall prey to an identity thief so if they can’t verify who you are by matching your ID (driver’s license) and billing address (with the application info) they wnat you to verify who you are in person. To me that isn’t a scam, they are doing what they are required to do and could very well explain the problem Frank (and possibly others) have encountered.

  42. Jeff says

    Moving money to the TD investment account will incur a $24 wire fee per Elfcu message:

    “Effective April 15th, Elfcu will be assessing a $24.00 wire transfer fee for all OUTGOING Wires being debited from HSA Accounts. Wire transfers are generally requested to transfer HSA funds for investment with TD Ameritrade. To correctly fund the wire, you must leave enough funds in the HSA account to cover the $24.00 wire fee. If funds are insufficient to cover the fee, the wire will be rejected and returned by the Special Accounts Department.”

  43. Harrison Chilton says

    A group of Stanford grad students are working to make a better experience for high deductible plans and HSA users. We are looking for input from the community and would love to get help from folks interested in the area.

    If you have 15 minutes to spare please shoot me an email at [email protected]. Would love to get your input as we try to revamp an area filled with inefficiencies.


    • Harry Sit says

      The 3rd item under Service Fees. Monthly Investment $3.00, waived if you maintain a bank account balance at or above the Balance Waiver Amount each day of the month.

  44. David says

    I’ve changed employers and HDHPlans. I’ve never been concerned with which bank is used til now. My impression has been that the insurance company (Aetna) dictates what bank (Chase) is to be used for HSA funds…Is this true ? or can i choose any bank offering HSA accounts?

    I make my own post – tax contributions, as the pretax payroll option is not available.
    Can someone provide some links to the FICA deduction losses “nickel” refers to….

    D in NY.

    • Harry Sit says

      If you contribute through payroll, the money is deducted pre-FICA and usually you don’t have a choice in which bank to use. Since you don’t have the payroll option, it’s moot. You contribute on your own, post-FICA, to the bank of your choice, and you take the deduction yourself on your tax return.

  45. Nicholas says

    Hi TFB – Question for you. I had just started contributing to a HSA with my previous employer and probably have ~2000 dollars in it.

    Now I have left that employer and my new employer doesn’t offer a HSA. Since I left my old employer I have been paying a ~$10/quarter or similar fee on the HSA since I am no longer an employee. I absolutely hate that….especially since there’s minuscule return in terms of interest.

    What are my options here?

    • Harry Sit says

      If you just want a savings account and draw it down for current medical expenses, Alliant Credit Union, no monthly fee, 0.65% interest rate.

    • Thooda says

      One option is to transfer your HSA balance to another custodian like a credit union. Example – open a savings and HSA account with Alliant Credit Union and do custodian to custodian transfer. Alliant HSA pays 0.64% apy as now today on HSA balance over $100. You can become a member by joining foster care to success with $10 donation and that’ll make eligible to gain alliant CU membership.

      This just one example. I’m sure there are other credit unions or financial institutions out there where you can do similar custodian to custodian transfer. But, not many have low minimum balance and no fee for HSA

  46. Brendan says

    There are plenty of no fee options. Most are like checking accounts. I used to have a no fee HSA from TD Bank. It paid no meaningful rate of return. Check out the HSA from Saturna Capital. It is one of the few that will easily allow you to invest in mutual funds. You could park that $2,000 in a growth fund and not touch it until you retire. You could also Google “no fee HSA” and should be able to find something.

  47. Mike says

    I’m not sure if they have recently upgraded their HSA accounts, but Wells Fargo seems to have a pretty good offering going for their HSA program. You can start to invest in a decent number of funds starting once you have $2,000 in the account. You don’t pay any monthly fees once you have a combined $5,000 in your investment / savings HSA account with them. And they offer at least one lower cost expense ratio fund WFIOX (.25% expense ratio). While it’s not Vanguard low, its better than average. This along with being able to avoid monthly fees and transaction load fees, and the convenience of a debit card, checks, and online banking seems to make this one of the best available for the public. What are your thoughts / recommendations on this one?

    • Harry Sit says

      Thanks for the heads-up. They stay true to what they promised: “Rates subject to change without notice.” $10 less per year on $2,500 balance. Annoying. I will move to Saturna next year.

  48. Answer is 42 says

    Lake Michigan Credit Union (LMCU) has basic HSA with APY of 2.0% for balanced over 5K (1.5% for less than 5K).
    Anyone can join with donation to ALS Association ($5 min. donation).
    Also, need to open a basic share acct, with minimum of $5.
    No additional fees.
    If one wants to let money sit in an account without investing, this is the best rate I have found so far.

    • Edward says

      LMCU has changed this sometime in the past month.

      Base Rate Annual Percentage Yield (APY)
      $0 – $4,999.99 0.50%
      $5,000+ 1.00%

  49. Kevin says

    Why don’t more brokerages offer HSAs? Every brokerage and bank out there offers IRAs. A few years ago, I figured it was just because the accounts were still new. But they’ve existed for over 10 years now. It seems like almost all institutions offering them have the mindset that a consumer has only one HSA, and that they must require some minimum cash balance to make sure the consumer has money for health expenses. But these days, HSA balances can be pretty hefty, and consumers are definitely looking for long-term investment options beyond the short-term savings account. It looks Saturna is is one of the few (if not only) brokerages to understand this and go after the market. If only there were some competition!

  50. Linda says

    Hi, Harry:
    Would you please so kind as to give us an update on the best HSA provider?
    Have you already moved to Saturna?


  51. Dave M says

    I’m also curious to know if the HSA recommendations have changed for 2016, and if Harry moved to Saturna. I see Wells Fargo offers an HSA and it looks pretty attractive except for their high-expense investment choices.

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