Author Topic: Best HSA Custodian? (Concerned about fees) (Read 22374 times)

Dyk

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Best HSA Custodian? (Concerned about fees)
« on: December 11, 2014, 09:48:49 AM »
Yea, I now have an HSA option! I can chose my custodian. I have read the Mad FIentist articles and want to use it as an investment vehicle. I like Vanguard.
I am thinking of using this before my company 401k (no matching), since I can avoid Social Security & Medicare tax, as well as have more control over my investments. The 401k is through John Hancock, and does not have anything with a fee under 1.2%

I have poked around the forums and online a bit, and I wondered if anyone had comments on:
- HSA bank - It appears I pay $2.50/month until I hit $5,000 balance, also $3.00/month for 'Monthly Investment' until I hit the $5,000 balance. I am thinking this is a fee to link it to the TD Ameritrade account, which I would do. Source: (http://hsabank.com/~/media/files/fees_s1) The TD Ameritrade appears to give Commission free ETF trades with no monthly fee? (Source: http://tdameritraderetirement.com/forms/ACS1009.pdf - This was linked to from HSA Bank) Vanguard ETFs are listed here.

or
- Health Savings Administrators (Who use HSA Bank ......) - $45/annually + .0008 * each fund balance per quarter capped at $20,000 balance. This means a $16/quarter charge, per fund. (Source: http://healthsavings.com/wp-content/uploads/2014/12/FEE_SCHEDULE_02.14.pdf)

Does anyone have any experience with any of these?
I am leaning HSA Bank for the fees, once I hit $5,000, there are not fees? Am I thinking about this correctly?

Thanks for your help, you guys rock!
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pdxvandal

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #1 on: December 11, 2014, 10:23:21 AM »
I'm with Wells Fargo. They charge $4.25 per month of fees if your balance is below 5k. I'm going to hit the 5k mark in January ... so no monthly fees and a fairly low cost index fund (~.30).

kendallf

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #2 on: December 11, 2014, 10:42:12 AM »
I did some searching around myself a couple of months ago and concluded that HSA Bank offered the best combination of reasonably low fees and investment options. It's a fairly short list of companies which will allow you to open a self administered HSA account when they're not the plan's custodian (Fidelity will not, for example). I have a Chase HSA account currently (they are the custodian for Aetna HDHP) and I'm moving mine over probably after the first of the year.
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RyeWhiskey

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #3 on: December 11, 2014, 10:45:55 AM »
I use HSA Bank. I decided to go with them over HSA Administrators for a couple reasons, but the first is that, over time, their fees are lower (the lowest I could find, actually, with access to Vanguard funds). It appears as though you have done your math correctly and can see why it is less expensive than HSA Administrators.

Yes, once your balance in the HSA Bank account (not the TD Ameritrade account) is at 5k they will waive the monthly fees and you will earn 0.20% on this balance. Be advised: $66/year on $5,000 is 1.3%. On $10,000 it is 0.66%. On $15,000 it is 0.44%. You can see where I'm going here. You can probably earn more than that by investing the $5,000+ and simply paying the $66/year in fees (this is what I do currently).

Also, there is no fee to open the TD Ameritrade account. Congrats on having an HSA option- it is easily the most versatile of tax shelters.

brooklynguy

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #4 on: December 11, 2014, 01:58:23 PM »
I've started researching this lately as well. Some forum members have described ELFCU as the cheapest option -- http://elfcu.org/health-savings-account/. Supposedly they have the same investment options as HSA Bank but charge lower fees, but I haven't independently confirmed yet. Completing my research and picking an HSA custodian is still on my to do list.

J'onn J'onzz

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #5 on: December 11, 2014, 02:14:42 PM »
I've started researching this lately as well. Some forum members have described ELFCU as the cheapest option -- http://elfcu.org/health-savings-account/. Supposedly they have the same investment options as HSA Bank but charge lower fees, but I haven't independently confirmed yet. Completing my research and picking an HSA custodian is still on my to do list.

I am pretty sure they have recently, in the last 6 months or so, added some fees and no longer look as attractive as they once did.

They added a $3/month fee if the average daily balance in the savings account drops below $2500. (this one is not to bad)

$24 wire transfer fee that if I understand correctly is charged every time you want to transfer money from the savings account to the investment account of the HSA. (This one is a deal breaker for me.)


dodojojo

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #6 on: December 11, 2014, 02:56:44 PM »
I'm new to HSAs too. I just made my election for 2015. My company contributes up to $750 to my HSA--if I use the designated administrator. For 2015, the company switched to Fidelity. From my limited research, Fidelity seems to be a good pretty deal. As long as I'm an employee, my company covers the plan fees which are I think, $48 annually. When I leave, I would then be responsible for the fee, but Fidelity waives it if you have at least $250K with them. My 401K is with Fidelity and approaching that figure, so I should be covered if I leave the company.

A HSA with Fidelity is a brokerage account so that opens up all the investment options offered by the company--over 4,000 funds/ETFs. What I like best from I learned is Fidelity doesn't require any of your funds to be in an actual savings account. The money is taken from payroll and goes into a sweep account. From the sweep account, I can invest any or all of it. I declined the HSA option for 2014 partly because the company's soon to be ex-HSA administrator required a minimum balance of $2,000 in an ultra-low interest earning savings account. Fall short of the 2K and you get dinged with another on-going fee.

Dyk

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #7 on: December 12, 2014, 06:18:10 AM »
Everyone, thank you very much for your input!

RyeWhiskey, thanks, I hadn't thought through it far enough to see that the 5k would be outside the TD Ameritrade account. But as you point out, getting 1.3% return on the money doesn't make sense. So now I am informed, and can stomach $66/yr. for the benefit this brings.
Yes, once your balance in the HSA Bank account (not the TD Ameritrade account) is at 5k they will waive the monthly fees and you will earn 0.20% on this balance. Be advised: $66/year on $5,000 is 1.3%. On $10,000 it is 0.66%. On $15,000 it is 0.44%. You can see where I'm going here. You can probably earn more than that by investing the $5,000+ and simply paying the $66/year in fees (this is what I do currently).

I have signed up with HSA Bank and await the welcome packet. It will probably take quite a few months to get some valuable feedback, but I will post it when I do.
Thanks again.
'Dyk is IN, let the fun beGIN!'

wuj818

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #8 on: December 14, 2014, 07:30:13 PM »
If you go with HSA Bank you should pay the fees by sending them a check instead of letting them deduct it from the HSA.

They probably accept monthly payments but I just prepay the entire year ($66) every January.

mharmless

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #9 on: December 16, 2014, 11:32:23 AM »
Regarding the HSA bank, what does it take to enable the TD Ameritrade option? I've got an account with them, opened earlier this year, and currently about 900 bucks in there. Wanted to get the investment options opened before committing the remainder of this year's money or transferring any in from elsewhere, but I don't see a place to open or start that. This is from their website:

Quote
1. Open a self-directed HSA Investment Account with TD Ameritrade

Log in to your account to enroll. A monthly investment fee may apply (Please refer to your Health Savings Account Fee and Interest Schedule).

I emailed them on Thursday of last week seeking clarification but haven't heard back yet. Perhaps the process changed with the new website? Perhaps ~900 isn't enough in there yet to offer investment to me? I dunno. Saw this thread and was hoping somebody else had done this recently and could point out what I'm doing wrong.


Secondly, I'd emailed them about pre-paying my HSA fees near the end of July, here is the reply I got from the rep:
Quote
Dear (MHarmless),

Thank you for contacting HSA Bank.

Unfortunately, at this time we do not offer the feature to prepay monthly fees. If you have any questions or would like further assistance, please feel free to contact our Customer Contact Center at toll-free at 1-800-357-6246 or international 920-803-4100. Our representatives will be available to assist you Monday through Friday from 7 AM 9 PM CST, and Saturday 9 AM 1 PM CST.

Sincerely,
Vanessa Hutchison
Associate
Customer Contact Center

HSA Bank
PO Box 939
Sheboygan, WI 53082-0939
Phone (800) 357-6246
Fax (877) 851-5274

What process do you have to do in order to pre-pay? I would dearly love to not have my fees come out of the tax advantaged money.

Thank you, Mustachians.

mharmless

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #10 on: December 16, 2014, 05:59:11 PM »
Part of this is now answered. To enroll in investments you log in, go to Accounts -> Account Summary, click the small link to View HSA Summary, this will show a link Manage Investments, even if you haven't yet opened one. This will get you to a page where you can enroll in TD Ameritrade or DEVENIR.

wuj818

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #11 on: December 16, 2014, 09:11:58 PM »
What process do you have to do in order to pre-pay? I would dearly love to not have my fees come out of the tax advantaged money.

Maybe they changed it but I was able to prepay this year's fees back in January. I also did it for 2013 by prepaying the fees in January of that year.

I use my bank to send them a check with "prepay 1 year of fees for #account-number-here" as the memo.

Here's the response I got from them back in December 2012:

Quote
Thank you for contacting HSA Bank. In response to your inquiry, you can prepay your monthly fees by mailing in a check with your account number and the phrase to prepay monthly fees written in the memo portion of the check. Unfortunately, we do not have the ability to withdraw the fee from a separate account. If the monthly is not prepaid it will come directly out of the HSA.
« Last Edit: December 16, 2014, 09:15:05 PM by wuj818 »

Dyk

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #12 on: December 18, 2014, 09:41:05 AM »
wuj818, thanks for the tip!
mharmless - thanks for the guidance, once I am up and running I will need to do that!

Still waiting on the 'Welcome Packet' ........
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furdburfle

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #13 on: December 18, 2014, 03:10:27 PM »
Try Connexus. They're a Credit Union in Wisconsin (available online). They don't charge anything for an HSA account and actually pay about 1% interest. You need to put $5 into a savings account to open the HSA and then you have to purchase some checks, but after that it doesn't cost anything. Not sure if you can invest with the funds, probably not.

Dyk

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #14 on: December 19, 2014, 06:38:12 AM »
mharmless, you rock! That was not at all intuitive. Thanks!
Now waiting on the TD Ameritrade Welcome Packet!
'Dyk is IN, let the fun beGIN!'

wuj818

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #15 on: January 02, 2015, 09:38:04 AM »
HSA Bank's new system doesn't allow prepaying fees anymore.

MDM

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #16 on: February 18, 2015, 02:10:21 PM »
See http://whitecoatinvestor.com/choosing-an-hsa-provider/ for a good review of HSA plans offered by the providers listed below.

The article generally recommends
HSA Bank or Fidelity HSA

It also covers
HSA Administrators
Alliant Credit Union
Stanford Federal Credit Union
Wells Fargo
Adirondack Trust
Lake Michigan Credit Union
Bank of the Sierra

Any of the above might be "best" for someone, depending on one's specific plans for an HSA.

Also, the article is a couple of years old so things may have changed. If anyone knows of a material change, let us know.

Roots&Wings

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #17 on: July 17, 2016, 09:03:40 AM »
I'm also trying to figure out best HSA for my situation, and have found HSA search very helpful for comparing HSA providers.

My HSA funds (small balance under $2,500 that I can no longer contribute to due to employer health plan) are sitting in my credit union earning only 1% interest (but no fees).

Thinking of going with Saturna Capital affiliated mutual fund account, which has no fees per Saturna website. Going self-directed brokerage would have annual fees, while their Amana growth fund AMAGX returns seem on par with 500 Index fund returns per Morningstar fund compare.

Of the 8 self-directed brokerage HSA account providers, Saturna seems to be the only one with no fees. Bogleheads had a fairly positive review of Saturna HSA brokerage, wondering if anyone here has experience with their mutual fund account?

MDM

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #18 on: July 17, 2016, 09:33:45 AM »
I'm also trying to figure out best HSA for my situation, and have found HSA search very helpful for comparing HSA providers.
Thanks - nice site!

Quote
...their Amana growth fund AMAGX returns seem on par with 500 Index fund returns per Morningstar fund compare.
Fee of 1.08% is high. 10 year S&P 500 comparison looks good for AMAGX, but not the most recent 5 years.

Spork

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #19 on: July 17, 2016, 10:25:16 AM »
Regarding the HSA bank, what does it take to enable the TD Ameritrade option? I've got an account with them, opened earlier this year, and currently about 900 bucks in there. Wanted to get the investment options opened before committing the remainder of this year's money or transferring any in from elsewhere, but I don't see a place to open or start that. This is from their website:


I am likely to be slightly incorrect. This is from memory and mine sucks.

  • login
  • click on "manage investments" ... should see "TDAmeritrade ... Enroll now"
  • go through enroll... wait for packet in snail mail
  • set up your account on TDAmeritrade using the stuff they mail you. My vague recollection is there are 2 different packets that came a day or two apart.
  • enable commission free ETFs on TDAmeritrade
  • optional... if you already have a TDAmeritrade account... you can link the two for ease of access
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Roots&Wings

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #20 on: July 17, 2016, 11:03:55 AM »
I'm also trying to figure out best HSA for my situation, and have found HSA search very helpful for comparing HSA providers.
Thanks - nice site!

Quote
...their Amana growth fund AMAGX returns seem on par with 500 Index fund returns per Morningstar fund compare.
Fee of 1.08% is high. 10 year S&P 500 comparison looks good for AMAGX, but not the most recent 5 years.

Thanks for this! Yeah, the expense ratio for AMAGX stinks (and I'd never normally consider a fund like this) but the HSA brokerage account annual fees work out to just over 1% of my account balance if I could pick a low fee Index fund...so might be a wash in my case.

Saving in Austin

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #21 on: July 20, 2016, 06:45:21 PM »
I'm have 38K in VTSAX with Health Savings Administrators.

What is a comparable investment with HSA Bank?

Spork

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #22 on: July 20, 2016, 08:06:52 PM »
I'm have 38K in VTSAX with Health Savings Administrators.

What is a comparable investment with HSA Bank?

I believe you'd buy VTI as an ETF as a comparable.
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SDRusty

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #23 on: July 21, 2016, 02:42:13 AM »
I am considering Bank of America - they waive the monthly fee if you have Preferred Rewards status and offer several Vanguard funds at less than atrocious terms: S&P 500 INDEX (VFINX) at 0.17% fees and TOTAL INTL STK INDEX at 0.22% fees. Does anyone have any experience with Bank of America's HSA platform or service?

LuckyOwl

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #24 on: July 21, 2016, 11:46:30 AM »
The HSA plan at my work uses BOA. I find their interface to be a little clunky and unpolished, but the functionality is there.

Two annoyances worth mentioning:
1) When using the auto investment option it takes several days after payday for the funds to actually be invested. It *appears* that the contribution first goes into a cash account (which is required to have a minimum $1,000 balance before any money can be invested), which takes a day or two, and then it goes from the cash account into whatever fund allocation you've set up, which takes another day or two.

2) There is an online cabinet where scanned receipts can be uploaded for future reimbursement. Unfortunately, their system automatically reduces the image quality of the scan. Sometimes the images still look ok, but other times the text is unreadable. I've only tried uploading pdf files since that is what my scanner spits out, not sure if other file formats would fare better. I contacted their support group earlier this year regarding this issue. Not sure if anything has been done to make the stored images better.

Interest Compound

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #25 on: August 09, 2016, 03:12:11 PM »
I'm also trying to figure out best HSA for my situation, and have found HSA search very helpful for comparing HSA providers.

My HSA funds (small balance under $2,500 that I can no longer contribute to due to employer health plan) are sitting in my credit union earning only 1% interest (but no fees).

Thinking of going with Saturna Capital affiliated mutual fund account, which has no fees per Saturna website. Going self-directed brokerage would have annual fees, while their Amana growth fund AMAGX returns seem on par with 500 Index fund returns per Morningstar fund compare.

Of the 8 self-directed brokerage HSA account providers, Saturna seems to be the only one with no fees. Bogleheads had a fairly positive review of Saturna HSA brokerage, wondering if anyone here has experience with their mutual fund account?

I use my HSA as a retirement vehicle. I did lots of research on this, and ended up at Saturna. It was the cheapest option I could find that offered index funds, and didn't require any money sitting in cash before I could invest, which has it's own opportunity cost which is it's own fee. This thread was particularly useful. Here's the TL:DR. Make your investment once a year, and all you'll have to pay is the "cost per trade" (once a year), and any dividend reinvestment fees (probably 4 times a year).

Vanguard Mutual Funds
=========================
Cost per trade: $24.95
Admiral Shares: Yes (*without* meeting the minimum 10k requirement).
Dividend re-invest: no charge
Inactivity fee (no trade within calendar year): $12.50


Fidelity Mutual Funds
=========================
Cost per trade: $14.95
Admiral Shares: Yes* (but *will* need to meet 10k requirement). The new website will give you an error right away if the order doesn't meet the fund's minimum.
Dividend re-invest: no charge
Inactivity fee (no trade within calendar year): $12.50


ETF (Vanguard & Fidelity)
=========================
Cost per trade: $14.95
Dividend re-invest: $1
Inactivity fee (no trade within calendar year): $25
Passive investing has a deep humility at its core--the aim is not to separate winners from losers, but rather to hold the entire market. Volatility is only temporary, but you can permanently cripple your portfolio trying to avoid it.

Roots&Wings

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #26 on: August 09, 2016, 04:23:47 PM »
That's great information, thanks Interest Compound! I've been sitting on the decision. Now leaning Saturna self-directed brokerage Vanguard Mutual Fund and pay $12.50 annual inactivity fee since I'm locked out of making additional contributions while working for the next 5 or so years.

DavidAnnArbor

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Re: Best HSA Custodian? (Concerned about fees)
« Reply #27 on: August 14, 2016, 09:21:05 AM »
I'd like to add that Saturna charges a $75 fee for transferring out your account. So if there's a cheaper HSA administrator in the future, Saturna will charge a lot to transfer out the account.