Discover the best HSA providers, offering tax-advantaged savings accounts for your healthcare expenses. Learn how to choose the right HSA for your high-deductible health plan.
A Health Savings Account (HSA) is a tax-advantaged savings account that individuals can use to pay for qualifying medical expenses.
To be eligible to contribute to an HSA, an individual must be enrolled in a high-deductible health plan (HDHP). Contributions to an HSA are made with pre-tax dollars, the money in the account grows tax-free, and withdrawals for qualified medical expenses are tax-free as well.
Individuals can use HSA funds to pay for a wide range of qualified medical expenses, including doctor visits, prescription drugs, and hospital stays. HSAs can be used in conjunction with other forms of health insurance, such as a flexible spending account (FSA) or a health reimbursement arrangement (HRA).
HSA contributions are capped annually and there is a catch-up contribution limit for 55 or older.
Additionally, there are restrictions on how much an individual can contribute to an HSA based on their health insurance plan, and certain types of medical expenses may not qualify for reimbursement.
The best HSA accounts
- Best overall: Lively
- Best for investment options: Fidelity Investments
- Best for short-term spending: HealthEquity
- Best HSA offered by a traditional bank: Bank of America
- Other options: HSA Bank, Optum Bank
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Lively – Best overall
Overall, Lively is the best HSA for individuals because it doesn’t have any hidden fees that will cut into your savings.
Some HSA providers make it hard to find interest rates and other account details on their websites, so people have to call or email to get the information they need. The website for Lively is simple, easy to use, and puts important information in plain sight.
Customers also have access to a lot of commission-free investments online through a self-directed brokerage account with Charles Schwab, which costs $0 if the account balance is at least $3,000 and $24 if it is less than that.
The other way to invest is through a guided portfolio from Devenir. There is a fee of 0.5% per year, but there is no minimum amount of cash needed to invest in it.
Like many other HSAs, a Lively HSA comes with a free debit card that can be used to pay for health care costs. It also has online banking and a mobile app that you can use to check on your account and manage it from anywhere.
The website is easy to use and has a guide to the HSA as well as a lot of helpful articles, calculators, and videos. Cash in a Lively HSA is protected by the FDIC and earns interest.
Lively also makes it easier for employers to manage HSAs.
Fidelity HSA – best for investment options
Fidelity Investments has a lot of low-cost investment options for HSAs, and there are no account fees or minimums to open an account.
You can put your money into stocks, bonds, ETFs, CDs, mutual funds, and more. Online trades of U.S. stocks and ETFs don’t have any fees, but some investments may have hidden fees.
Fidelity also has fund choices that are only for HSA customers of Fidelity. Account holders can manage their own investments, choose a managed account, or open both a self-directed HSA (Fidelity HSA) and a managed HSA (Fidelity Go HSA).
With a Fidelity HSA, it’s easy to get to your HSA funds and pay your medical bills. Customers get a debit card and can pay bills online. They can also transfer money from their HSA to their own bank account to pay themselves back for expenses they’ve already paid.
Fidelity also has calculators, tools, and market research that can help you keep track of your account and manage it.
HealthEquity – best for short-term spending
HealthEquity is one of the largest HSA providers and is not a bank.
It’s a good option for people who need to use their HSAs often for medical costs because there are many ways to spend money and keep track of the account. Account holders can use a debit card, a check, online banking, or the mobile app to get to their money.
The HealthEquity mobile app lets you send payments and reimbursements, check the status of claims, take pictures with your device to start claims and payments, and link debit card transactions to claims and documentation. There is an annual fee of 0.36 percent, which can’t be more than $10 a month.
HealthEquity is based in Draper, Utah, and they offer customer service by phone or live chat 24 hours a day, 7 days a week.
HealthEquity savers do get some interest, but the rates are not shown on the website and depend on how much they have saved. There are federal limits on how much the FDIC will cover.
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Bank of America HSA – best HSA from a big bank
Many people like how easy it is to handle all of their money at one bank. Bank of America is the second-largest bank in the United States. It has more than 4,000 branches and about 16,000 ATMs, so it’s easy to get access.
It also has a full set of digital and online tools, so you can get to it in many ways. It’s a good option for people who would rather go to a branch of their bank than do everything online.
You can submit claims and keep an eye on your HSA through the member website or the MyHealth BofA app. The HSA comes with a Visa debit card that doesn’t charge fees to make purchases.
It has a savings calculator, and customers can get help by phone or online chat any time of day or night. The bank also gives advice and education on how to match health and wellness goals with financial strategies.
Savers get interest at different rates, with 0.07 percent APY being the highest rate for balances over $25,000. Investors can choose from a large number of mutual funds run by Merrill Lynch, which is a division of Bank of America.
There is no minimum amount that needs to be in the account to invest, and the standard monthly account fee is $2.50 (which may be waived if the HSA is through your employer). BofA does not charge fees to buy or sell investments, but mutual funds have costs that are paid by the fund itself. BofA also manages HSAs for both small and big businesses.
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HSA Bank
HSA Bank has many of the same features as other modern HSAs, like the ability to access your account online and a mobile app.
You can use a check, a debit card, or a bill-pay system to pay for medical costs with money from your HSA account.
HSA Bank has TD Ameritrade Self-Directed Brokerage and DEVENIR Self-Directed Mutual Fund Program as ways to invest. Here, you can find out more about both.
Individual HSA accounts at HSA Bank no longer have to pay maintenance fees every month. The minimum quarterly fee for the Devenir Guided Portfolio Self-Directed Investment Program is $1.50. The annual fee is 0.30% of the assets under management.
Note: You only have to pay the advisory fee on the first $50,000 in your investment account.
Once you have at least $1,000 in your HSA Bank cash account, you can start investing. Your investment account can only be linked to your HSA Bank cash account if it has more than $1,000 in it.
Optum Bank
Optum Bank is a part of UnitedHealth Group’s technology services division, Optum.
If you work for a big company, this is probably the HSA that your company health plan will use by default. Their fee is $2.75 per month (usually covered by the employer). No minimum balance is needed to get started. This plan comes with a debit card, a checking account, online banking, and a mobile app.
Optum Bank is a member of the FDIC, handles more than 3 million accounts, and is in charge of $9 billion in assets.
Optum Bank gives you a lot of choices for how to invest your money. You’ll have to invest at least $2,000 before you can do anything else. After that, you can easily rebalance your portfolio and move money between investments and your main account.
The bad thing about investing with Optum is that you have to use their platform and pick funds from their list. They are fine, but they aren’t usually the best. You also don’t have the flexibility of being able to invest on a platform like TD Ameritrade.
But if you leave your job, your monthly fees will start to be taken out of your bank account, and Optum isn’t the cheapest option.
How do you choose the best HSA?
When choosing an HSA, there are a few things to consider:
- Eligibility: Make sure you are eligible to open an HSA by checking that you are enrolled in a high-deductible health plan (HDHP).
- Fees: Compare fees charged by different HSA providers, including monthly or annual fees, transaction fees, and fees for using certain features or services.
- Investment options: Some HSAs offer the ability to invest funds in a variety of mutual funds, stocks, and bonds. If you plan to use your HSA as a long-term savings vehicle, consider an HSA with investment options.
- Network of providers: Some HSAs have a network of providers that you can use to pay for healthcare expenses. If you have a preferred provider, make sure they are included in the HSA’s network.
- Online features: Check if the provider offers online account management, mobile apps, and other features that make it easy to manage your HSA.
- Customer service: Consider the level of customer service provided by the HSA provider. Make sure they have a dedicated customer service team that can help you with any questions or issues you may have.
- Check the contribution limits: Be aware of the contribution limits for HSAs, as these are subject to change and vary by year.
- Compare plans: Research and compare different HSA plans to find one that best meets your needs.
It’s important to do your research and compare the different options available to you to determine which HSA plan is the best fit for you.
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Who are Health Savings Accounts for?
Health Savings Accounts (HSAs) are for individuals who are enrolled in a high-deductible health plan (HDHP). HSAs are designed to help individuals save money on healthcare costs by allowing them to pay for qualifying medical expenses with pre-tax dollars.
HSAs can be beneficial for individuals who:
- Have a lower income and are looking for a way to save on healthcare costs.
- Are in good health and do not expect to have many medical expenses.
- Want to use the HSA as a long-term savings vehicle to pay for healthcare costs in retirement.
- Want more control over their healthcare spending.
- Want to take advantage of the tax benefits associated with HSAs.
It’s important to note that HSAs are not the best option for everyone and that everyone’s financial and healthcare needs are different. It’s always a good idea to consult with a financial advisor before opening an HSA to ensure that it’s the right fit for you.
Bottom line
Overall, HSAs are a good way for people to save money on taxes and pay for their healthcare costs, especially for those who are in good health and don’t expect to use the account for major medical expenses.
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