Best Health Savings Accounts (HSAs) and How They Compare
Health savings accounts (HSAs) are a valuable tool for saving and investing in a tax-efficient manner. Paired with a high deductible health insurance plan (HDHP), HSAs offer the “triple tax advantage” of tax-deductible contributions, tax-free growth, and tax-free withdrawals when used for qualified medical expenses. This makes HSAs a crucial component of a comprehensive healthcare and financial strategy.
When it comes to choosing the right HSA provider, there are several factors to consider. Transparency, fees, investment options, minimum investment thresholds, and robo-advisor options all play a role in determining the best HSA for your needs. To help you navigate the vast array of choices available on the market, we have compiled a list of our top recommendations based on these factors.
1. Fidelity Investments: Best for investors
Fidelity offers a comprehensive HSA that sets the gold standard for account features. With no account minimums, monthly maintenance fees, or minimum investment thresholds, Fidelity’s HSA provides access to a wide range of investment options, including no-fee mutual funds, ETFs, stocks, bonds, and high-yield money market funds. The Fidelity Go robo-advisor service is also available for balances of $25,000 or more.
2. Bank of America: Best bank
Bank of America is a solid choice for HSA account holders, especially for existing banking customers. With convenient mobile access, 40 mutual funds, including low-cost index funds, and the Vanguard Federal Money Market Fund, Bank of America offers simplicity and accessibility to its customers.
3. Lively: Best for transparency
Lively stands out for its transparent pricing and no hidden fees. With no monthly maintenance fees, minimum balances, or transfer fees, Lively’s basic account is an excellent choice for those who prefer simplicity and low costs. The investment option requires opening an account with Charles Schwab, providing access to thousands of investment options.
4. Optum Bank: Best for large accounts
Optum Bank is a popular choice for employers and individuals with high balances. While the monthly maintenance fee is $3.75, it is waived for accounts with balances of $5,000 or more. With more than 25 mutual fund investments, including low-cost index funds and target-date funds, Optum Bank offers advanced features and investment options for account holders.
5. HealthEquity: Best robo-advisor
HealthEquity is the largest HSA provider, offering robo-advisor services and a variety of investment options. While there is a $1,000 minimum opening deposit to start investing, HealthEquity provides self-directed, AutoPilot, and GPS robo-advisor options for account holders looking for personalized investment strategies.
When selecting an HSA provider, it’s essential to consider factors such as transparency, fees, investment options, minimum investment thresholds, and robo-advisor services. Each provider has its unique strengths and features, so it’s crucial to evaluate your needs and preferences before making a decision. With the right HSA provider, you can maximize the benefits of tax-free healthcare savings and investing for the future.
