In previous articles I said Elements Financial, formerly Eli Lilly Federal Credit Union (Elfcu), offered the best HSA for investing HSA money. I moved my HSA there. I documented the setup process in details in Setting Up HSA at Elements Financial.
New Wire Transfer Fee
Reader John brought to my attention that Elements started a new wire transfer fee for transfers from the savings account to TD Ameritrade for investing. I logged into my account and lo-and-behold I see a fee change notice in the message center, which reads:
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.
This certainly increases the cost of using Elements for HSA. On the other hand, $24 for a wire transfer isn’t that out of line. For instance Ally Bank charges $20 for a domestic outgoing wire transfer. So does PenFed. Alliant Credit Union, where I have my primary checking account, charges $25.
I don’t understand why the transfer from the credit union to TD Ameritrade has to go by wire. A push by ACH delays the transfer by one day but it costs nearly nothing. I contacted Elements customer service and asked them to consider doing the transfers by ACH, or (gasp!) by paper check.
Of course they won’t just change their business process just because I said so. Does this $24 transfer fee make Elements not the best HSA provider any more?
Fund and Transfer Once A Year
For the way I use the HSA, and I imagine the same way many of you use it, I think Elements is still the best.
I make my HSA contributions by payroll deduction to the HSA provider chosen by my employer. Once every rolling 12 months I ask for a distribution from my employer’s HSA provider. Then I make a rollover contribution to my own provider, in this case Elements Financial. Once the money is credited, I transfer it to TD Ameritrade for investing. See previous article How To Rollover an HSA On Your Own and Avoid Trustee Transfer Fee.
If you don’t go through an employer, you can still fund the account once a year and transfer to TD Ameritrade once a year. You would pay the $24 fee once a year. It’s not a big deal.
[Update: Starting in July 2014, Elements will also charge a $3 monthly fee if the average daily balance on the savings account side is below $2,500. See follow-up post Elements Financial HSA Adds Monthly Fee, Slipping Away From The Best.]
If you don’t like the fee increase, you have some alternatives.
At HSA Bank you can pay $66 in fees per year or leave $5,000 behind earning 0.25%. This is more expensive than Elements if you fund and transfer to investments once a year. It’s less expensive than Elements if you transfer frequently.
Saturna Brokerage Services
Saturna Capital offers HSA in a brokerage account operated by Pershing. You can buy ETFs or index funds at $14.95 a trade. It’s less expensive than Elements if you do one trade per year. It’s more expensive if you trade more often.
Stay or Move?
I’m staying with Elements. By the time I need to do the rollover and transfer again next year, I hope they will have figured out how to do the transfers by ACH or paper check. If not, paying $24 once a year is still not that bad. Most people fund their IRA once a year as opposed to monthly. You just add HSA to the list. That’s why you keep a cash reserve/emergency fund. You dip into it when you need money. Then you fill it back up.
Say No To Management Fees
If an advisor is charging you a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice.