HSA Account Comparison

[TheDude]

There has been some chatter on here about which HSA account is the best. It can be pretty confusing with all the fees. I went ahead a put together a spreadsheet showing some of the more popular options. You can go access it here

https://docs.google.com/spreadsheet/ccc?key=0Ao3W1htzFpYidGNRemw1amVqRWNQU2txNEZJbjZoTUE

It assumes that you are using it as an investment vehicle. In other words it assumes that the value only grows and never gets reduced.

Also just so you know. I picked the banks because they seem to be paying the best interest rate. I picked the investments firms because HSA uses TD ameritrade which has free purchases of ETFs and HSA Administrators because they have some low cost Vanguard funds.

Ok I think I have it edited so that anyone can change the numbers. Sorry I am google stupid. Its no excel thats for sure.

[annod]

Thanks!
I wonder how come Pacific Community CU has such high rate -3.25%? Almost seems too good to be true. Anyone bank with them and had positive experience?

How do I find out more about their general reliability?

[MooreBonds]

I have an HSA with HSA Bank, and pay the extra fee for the investment account. Back when I first opened my HSA with them (when HSAs were first introduced), they were just about the only game in town that allowed you to link it with a true investment account and invest in almost anything....and they are still  (I believe) the only game in town that gives you that option. As such, they still have the hands-down win for which HSA to go with if you plan on letting your stash accumulate and you expect to have minimal healthcare expenses.

As far as a fat 3% yield that some may be offering - compare that to their fees. Even just $3/month comes to 1% a year on a $3,000 balance - and most people that use HSAs to pay for their medical expenses probably keep far less of a balance than that (which means their $1,000 balance may be earning 3% interest...but if you're paying $36/year in account maintenance fees, that's 3.6%)

[TheDude]

Moore Bonds, Those arent my number those are numbers from a co worker. I max mine out and I dont make withdraws. I treat it like a retirement account.

I am thinking of switching to HSA Bank. How much do you keep in the cash account? I couldn't find a minimum anywhere. Also are there any fees I am missing? The 5.50 is all I see. Does TD Ameritrade charge any fees?

[Erica/NWEdible]

As the OP on the other HSA thread, thanks so much for this!

[MooreBonds]

I am thinking of switching to HSA Bank. How much do you keep in the cash account? I couldn't find a minimum anywhere. Also are there any fees I am missing? The 5.50 is all I see. Does TD Ameritrade charge any fees?

No other fees. Just the $2.xx for having an HSA Savings Account balance < $3,000 or so, and the other $3.xx for having the TD Ameritrade account. There might be a minimum to open the Ameritrade account...they normally require $2,000 min or so to open an account, so you might just need to accumulate some cash in the bank account before creating it.

[jawisco]

If you have more than 5K, I don't believe you pay any fees with HSA bank and TD Ameritrade option.  I like to put this money in stocks/bonds, so this was the best option for me (just moved from HSA Administrators because they were charging me $100 dollars a year in fees).

Keep your health-related receipts and pay your bills with after-tax money.  Let the HSA grow and grow...If an emergency comes up, you can deduct the amount you have in receipts at any time in the future penalty free...

[chucklesmcgee]

If you have more than 5K, I don't believe you pay any fees with HSA bank and TD Ameritrade option.  I like to put this money in stocks/bonds, so this was the best option for me (just moved from HSA Administrators because they were charging me $100 dollars a year in fees).

Keep your health-related receipts and pay your bills with after-tax money.  Let the HSA grow and grow...If an emergency comes up, you can deduct the amount you have in receipts at any time in the future penalty free...

From what I've read with HSA bank, those minimum balance requirements are minimum balance requirements in the ordinary cash account. Investment account funds don't count towards this. If you move all of your money into an Ameritrade account, you still have to pay the fees. If anyone knows otherwise please chime in.

[MooreBonds]

If you have more than 5K, I don't believe you pay any fees with HSA bank and TD Ameritrade option.  I like to put this money in stocks/bonds, so this was the best option for me (just moved from HSA Administrators because they were charging me $100 dollars a year in fees).

Keep your health-related receipts and pay your bills with after-tax money.  Let the HSA grow and grow...If an emergency comes up, you can deduct the amount you have in receipts at any time in the future penalty free...

From what I've read with HSA bank, those minimum balance requirements are minimum balance requirements in the ordinary cash account. Investment account funds don't count towards this. If you move all of your money into an Ameritrade account, you still have to pay the fees. If anyone knows otherwise please chime in.

That's correct - the minimum balances only apply to the cash in the HSA Bank savings account.

However, even with just a 3% dividend yield on a $5,000 investment, you're earning $150/year in dividends. Keep socking away contributions to the HSA, and before you know it, it's over $10,000. Spice up the mix with a few higher yielding holdings (maybe a preferred stock or two, or a Business Development company thrown in), and you're still yielding 4%+ capital gains growth after the PIA fees.

[chucklesmcgee]

However, even with just a 3% dividend yield on a $5,000 investment, you're earning $150/year in dividends. Keep socking away contributions to the HSA, and before you know it, it's over $10,000. Spice up the mix with a few higher yielding holdings (maybe a preferred stock or two, or a Business Development company thrown in), and you're still yielding 4%+ capital gains growth after the PIA fees.

It's not a terrible deal, but the principle itself is a little upsetting. They aren't terribly clear upfront in explaining that balance requirements are for the cash account only. I did email them and they said it's possible to mail in a check to cover fees, which wouldn't count towards contribution limits.

[fiveoh]

I use HSA bank too.  Just opened last year.  Next year I plan on keeping 5k in cash to avoid the fees and anything above that in the td ameritrade account.  Have to remember you are also paying $10 a trade in td ameritrade(this is their standard fee, im assuming this is the same for the HSA?).

[TheDude]

I use HSA bank too.  Just opened last year.  Next year I plan on keeping 5k in cash to avoid the fees and anything above that in the td ameritrade account.  Have to remember you are also paying $10 a trade in td ameritrade(this is their standard fee, im assuming this is the same for the HSA?).

Trades in general are $10 but they have 100 different ETFs that you can buy commission free.

[dragoncar]

You've convinced me to stay with HSA Bank if/when I have a choice (right now, employer contribution requires HSA Bank).  However, I'd be happier if I haven't applied for the brokerage window three times over the last few months with no response.  And they are pretty useless on the phone -- "I can't tell you why..."

[TheDude]

dragon car its good to look at the numbers but you can quantify customer service. That give me a little pause.  They cant just open when you talk to them on the phone? The one think I really like about Allaint is the customer service.

[rjack]

For what it is worth, here are some more HSA options:

http://www.depositaccounts.com/savings/health-savings-accounts.html

I use Lake Michigan Credit Union and I've been happy with their rates and service.

[dragoncar]

No idea if my experience is typical.  I opened a TD Ameritrade window for my 401k with no hiccups.  I assume part of the problem is that they are two separate entities, so neither one really knows what's happening at the other.  The first time they said "maybe your SSN was wrong" but they couldn't confirm or deny which SSN was used!

[fiveoh]

For anyone thats done it, how long does it take for your td ameritrade account to get setup once you fax/mail in the paperwork?  I sent it a while back, just wondering if I need to call them. 

[dragoncar]

For anyone thats done it, how long does it take for your td ameritrade account to get setup once you fax/mail in the paperwork?  I sent it a while back, just wondering if I need to call them. 

I think it's a week to a month if everything goes right.  Mine finally went through, but I can't be sure  which application to attribute.  I'd say if you don't hear anything in a month, contact them.

If everything goes smoothly, it could be as little as a week to hear back (this is how it worked for my 401k brokerage window, also with TD ameritrade).  You should get an email saying the account is set up and a packet is on it's way.  I didn't get this email because they mis-entered my email address (which was typed on the form I faxed).  They will also send you a PIN in the mail.  Once you get the PIN, you can register the account and get to work.

Thanks to MooreBonds for making me do math.  I was originally only going to invest amounts above the 5k minimum, but after calculating expected returns vs. minimum balance fees, I agree that it's worth paying around $5/month to have that 5k fully invested.  I guess that means I'll need to leave at least a year's worth of fees in the cash balance / savings side.

[TheDude]

Dragoncar don't do math. Thats what the spreadsheet is for. Just enter your number up top!

[Debbie M]

Thanks!
I wonder how come Pacific Community CU has such high rate -3.25%? Almost seems too good to be true. Anyone bank with them and had positive experience?

How do I find out more about their general reliability?

I don't know why their rate is high or whether they are reliable, but based on my experience with other bank interest rates, I'm guessing they're new and that it won't be long before their rates fall in line with those of everyone else.  Even Alliant was 2% around this time last year and I think it was 3% a year or so earlier when I first started doing research.