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I have a high-deductible health plan that qualifies me to open an HSA (Health Savings Account). Where are good places to find an HSA in the US? What sorts of features should I look for? What extra fees should I look out for?

JohnFx
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Bryan Anderson
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2 Answers2

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In general, things to look for are:

  1. How high is is the account's rate of return?
  2. How easy is it to access your money?

Things to look out for:

  1. Minimum monthly amounts to put into checking accounts, or you'll be dinged with a monthly fee
  2. Large expense ratios in "mutual funds" you invest into, or $5+ dollar expenses when investing in mutual funds.

I'd recommend two places:

  1. Find a high interest HSA savings account. For example, Stanford Federal Credit Union currently offers 1.5% to members without direct deposit, 2.5% to members with $500 direct deposit in a checking account. EDIT: SFCU has dropped their rates substantially and is not a recommended bank for this purpose.
  2. For longer term investments, consider Health Savings Administrators which have Vanguard Admiral funds. Realize this is a bit more risky if you're depositing/withdrawing money often, but it can pay off assuming the stock/bond market has a higher rate of return. This is, however, risky, as many people mention that you should not plan on having "growth" in a mutual fund like this unless you keep and hold money there for 3 or more years. Additionally, the customer service of Fulton Bank is awesome.

I'd recommend reading up on HSA's in this related question here.

Community
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CrimsonX
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    After recently setting up an account at Stanford FCU, I would definitely NOT recommend it to anyone else. The only thing in its favor is the high rate. The online banking website is absolute rubbish, and the service is fair-to-poor. I'm going to let it ride for a couple of months and will consider moving to a more reliable bank, even if I have to accept a lower rate. – bstpierre Feb 23 '11 at 16:03
  • @bstpierre: How did it work out with SFCU? Their HSA rates seems to have dropped to a fit inducing 0.200% – sekharan Mar 31 '14 at 03:33
  • SFCU changed their policies and rates of return, and I agree, I've moved my money away from their bank as well – CrimsonX Mar 31 '14 at 14:38
  • @sekharan: their premier HSA (requires monthly $500 direct deposit) is still at 1.5%. Everything else about having the account there is a hassle. When I've looked around at other banks, rates are generally in the 0.1% range, so the rate at SFCU is the only thing keeping me there. – bstpierre Apr 01 '14 at 11:53
  • Warning: HSA Administrators is great from the investment standpoint, but their customer service and website are terrible. They also try to extort fees at every opportunity. When I ended up over-contributing due to a website problem they had, they refused to waive the excess removal fee. Technically they have e-mail support but you'll be waiting weeks for an answer, which is sometimes not even correct (you'll get a different story depending on who you talk to). Investor beware. – Jeff Evans Apr 02 '14 at 18:29
  • @jeff303 I haven't had any of these issues, HSA Admin has been upfront with their fees (a set amount per year, plus a very small transaction fee on every purchase). I've had very responsive customer service, being able to have calls or e-mails answered within 1 day. – CrimsonX Apr 03 '14 at 13:25
  • @CrimsonX, that's great to hear. And yes, they are upfront with the fees and (theoretically) how to avoid them. I'm just saying that if you incur one due to their ineptitude, don't expect any reprieve. I'm just trying to provide my anecdote so that others may make an informed decision. And I'm not alone. http://www.mybanktracker.com/HSA-Bank/Reviews – Jeff Evans Apr 03 '14 at 14:44
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The account I have found that works best as a HSA is Alliant Credit Union. They have fee-free HSA (no fees for almost all types of transactions or monthly fees) and a fairly decent online banking website. I've been with them for about 5 years now without trouble.

FYI - They are a credit union not a bank so you do have to make a small $10 donation to one of their charities to become "eligible" for opening the account.

Sanjay Sheth
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