When I did the paperwork to move part of my IRA from Vanguard to a credit union, I also did the paperwork to move my Health Savings Account (HSA) to Saturna Brokerage Services. My previous HSA provider requires a minimum balance in a low-yielding savings account or else there would be a monthly maintenance fee. By moving to Saturna I’m able to invest everything in the HSA with no maintenance fee.
Unlike some other providers who offer a savings account and a linked investment account, Saturna Brokerage Services offers the HSA in a pure brokerage account. The brokerage account is serviced by Pershing, which is part of Bank of New York Mellon.
The commission schedule is very straight forward, basically $15 per online trade for mutual funds and stocks or ETFs; add $10 fee for some funds such as Vanguard. Dividend reinvestment is free for mutual funds; $1 per event for stocks or ETFs.
Among index funds, Vanguard Admiral Shares funds and Fidelity Premium Class funds are available. For some reason the all-in-one Fidelity Freedom Index Funds are not available. You can buy a Vanguard Target Retirement fund instead.
If you contribute once a year and you only make one trade, you just pay $15 (or $25 if you buy a Vanguard fund). As long as you make one trade per calendar year, there is no account maintenance fee, or else there would be an inactivity fee.
Saturna has all the forms necessary to open the HSA and transfer your existing HSA on its website. I sent them these in one big envelope:
- Brokerage account application
- A copy of driver’s license
- HSA Application form
- IRS 5305-B form (included in the HSA application PDF above)
- HSA Transfer form (included in the HSA application PDF above)
- A copy of the account statement of the current HSA to be transferred
- Online Account Access Form
- Electronic Funds Transfer/ACH form, to link the HSA with a checking account
The brokerage account application form is very long, but it’s still not that bad. I selected Retirement in Step 1, Hold and FDIC Insured Deposit in Step 7 for the sweep option, and Credit in Step 12 for how to receive interest and dividends.
Before I put the forms in the mail, I sold everything in the investment part of my HSA and I moved the money back to the savings account part. Ten days later, I saw the savings account was closed. Another few days later I saw the money in the Saturna brokerage account.
Other than the time spent on filling out the forms, the transfer process went smoothly without any intervention.
Operation-wise Saturna is a bit old school and white glove, which some people may actually prefer. After the account was set up, when I called them for a question, someone picked up on the first ring. There is no checkbook or debit card for the HSA. After you link your checking account to the HSA for ACH transfers, you still don’t see it online. To actually move money into or out of the HSA, you call them or send them a letter. They will do it for you. Because I only contribute once a year and withdraw once a year, doing it by phone or by mail works for me just fine.