An HSA is a healthcare savings account, similar to an IRA health insurance plan. Any contribution you make towards the HSA account isn’t taxed.
As long as you use the money for medical purposes, it won’t be taxed when you withdraw money, plus what you don’t spend can be invested or put in an interest-bearing account and grow tax-free as well.
9 Best HSA Accounts
Here are the top health savings account providers on the market right now:
- Optum Bank
- First American Bank
- The HSA Authority
- HealthEquity HSA
- HSA Bank
- Digital Federal Credit Union
Lively is an FDIC-insured HSA provider. It offers a Health Savings Account (HSA) account with no monthly fees and no minimum balance required.
This account comes with a debit card, the possibility to link it to your bank account for easy reimbursements, and it’s 100% paperless.
There are no paper checks or paper statements, which earns sustainability points.
To invest with Lively, you must have an account at TD Ameritrade. After you open that account, investing will be free, which is a great advantage.
If you want, it’s possible to invest 100% of the balance in your HSA with TD Ameritrade, and your HSA funds will earn 0.1% APY.
You could opt for several investments, such as individual stocks, bonds, CD accounts, ETFs, and a wide selection of mutual funds.
If you’d prefer a guided investment instead of an independent one, you can choose to invest in a guided portfolio at Devenir.
The guided portfolio comes with a 0.50% annual fee to pay for the extra help, while to invest independently at TD Ameritrade, you’ll be charged no commission fees.
Lively has an excellent mobile app where you can check your receipts, see your balance, track deductible health care costs and set up periodic contributions to your HSA account.
- option for self-directed or guided investments
- fee-free account
- many investment options
- great mobile app
- guided investment has a 0.50% fee
- no paper allowed
Fidelity is one of the largest investment brokers in the world.
Fidelity Investments’ HSA account has no monthly service fees and no minimum opening deposit requirement, just like Lively’s account.
Fidelity offers a complementary debit card, and it doesn’t charge any commission fees on stocks, ETFs, or options, but some other investment methods have some fees. Avoid paying unnecessary fees by always reading the fine prints.
If you’re also investing with other providers, Fidelity offers a convenient way of seeing all of your investments in one place. They provide a dashboard of and managing everything, which makes things easier.
There are multiple investment options to choose from, such as self-directed mutual funds, ETFs, stocks, bonds, US treasuries, CDs and options, or professionally selected funds.
- many options
- self-directed or professionally selected investing
- no maintenance fees
- no minimum opening balance
- some investment options have commission fees
3. Optum Bank
Optum is a technology services division part of UnitedHealth Group, which owns Optum Bank, among other things.
Optum Bank is technology-friendly, and its offer includes online banking, mobile banking, a debit card, and a checking account.
A lot of big companies have Optum as their default HSA account that they offer to employees.
There is no minimum starting balance, but there is a $2.75 monthly fee you or your employer will have to pay. If your employer is offering this account (and paying the fee), be mindful of it when you leave your job because these fees can add up.
Optimum Bank gives you plenty of options for your investments that you can check on their website, but they all have in common this requirement: a minimum balance of $2,000 to invest.
To invest with Optum, you’ll also have to use their platform and their fund choices. There isn’t an option to use others, such as TD Ameritrade.
Optum is a member of FDIC, so at least you’ll know that your deposits are insured, and it manages $9 billion in assets at the time of writing.
- member FDIC
- many investment options
- online and mobile banking
- offered by many employers as a healthcare plan
- have to use their investing platform
- minimum balance to invest
- monthly maintenance fees
4. First American Bank
First American Bank offers a highly appealing basic account with no monthly fees or minimum opening balance and many benefits such as unlimited check-writing, a complementary debit card for the ATM, and a mobile wallet.
This account earns interest, but it requires you to have a minimum balance of $2,000 in your checking account if you’d like to invest.
You can then invest in mutual funds for a monthly service fee of $2.95.
- no fees
- check writing
- mobile wallet
- service fee to invest
- minimum balance to invest
5. The HSA Authority
The HSA Authority is part of the Old National Bank, and it was designed from the very beginning to be an HSA provider, as you can probably tell from their name.
There is a $1,000 minimum opening balance required, but fortunately, no monthly maintenance fees afterward. There is a $36 annual fee for the investment account.
The account includes a debit card and check-writing. No-load mutual funds for investing are not included.
- no monthly service fees
- debit card
- check-writing privileges
- minimum balance
- annual fee
Learn More at OldNational.com/TheHSAAuthority
6. HealthEquity HSA
HealthEquity was founded in Salt Lake City, and it’s also built specifically to take care of consumers’ HSA account needs.
It offers three different options when it comes to investing:
- a low-interest cash account
- the Yield Plus Account, which pays a higher interest rate
- Vanguard funds
To invest, you’ll need to have a minimum of $500 in your account, and there is an investing administration fee of 0.03% to pay every month. Fortunately, the fee is capped, so you’ll never have to pay more than $10.
HealthEquity has an optional Advisor plan, a form of guided investing you can use for a fee of 0.05%, capped at $15 a month.
- Three options to invest
- Advisor plan
- fees and minimums to invest
Learn More at HealthEquity.com
7. HSA Bank
HSA Bank is very modern, and it has an excellent online account and mobile app. You can pay your healthcare expenses using bill pay, a debit card, or a check.
Just like Lively, HSA Bank uses TD Ameritrade and Devenir for investing purposes.
There is an option for a self-directed brokerage through TD Ameritrade and a self-directed mutual fund program via Devenir.
HSA Bank charges you a monthly fee of $2.50 if you don’t keep at least $3,000 in your HSA account.
The minimum balance required to invest is $1,000. If you don’t have that amount in your HSA Bank cash account, you won’t be able to transfer money to your investing account and earn interest.
- mobile app
- bill pay
- debit card
- options for investing
- monthly fee below a minimum balance
- minimum balance to invest
Further doesn’t disappoint in terms of HSA plan variety. It offers three different interest-bearing accounts:
- Further VALUE: This is an account with low fees, and it offers an investing option. The interest rates range from 0.05% to 0.20%, and the monthly fee is only $1.
- Further SELECT: A FDIC insured HSA account with an investment option. With this account, you’ll have to pay a monthly fee of $3 to earn an APY ranging from 0.05% to a maximum of 0.10%.
- Further PREMIUM: This HSA account earns the highest interest rate of the 3, starting from 0.35% until a very high yield of 0.70%, but it also has the highest fees. It asks for a monthly administrative fee of $4 in return.
To invest your cash, you also have two additional options: invest any excess over $1,000 into your choice of mutual funds pre-selected by Further.
The other possibility is investing any excess over $11,000 into a more extensive selection of mutual funds, stocks, bonds, and more.
If you want to use any of these two additional investment options offered through a self-directed brokerage account from Charles Schwab, there is an annual fee of $18 to take into account.
- high-yield HSA plans
- fees and limitations for investing
Learn More at HelloFurther.com
9. Digital Federal Credit Union
Our second pick is the DCU (Digital Federal Credit Union). DCU’s accounts are available nationwide, making it an excellent option no matter where you live.
It has an HSA account with no monthly fees and no minimum balance requirements and offers perks such as a debit card and unlimited check-writing abilities.
This account earns 0.20% APY for account balances until $1,000, and then the APY keeps increasing progressively on balances above that amount. The interest earned gets as high as 0.45% if you keep a balance of at least $100,000 in your account.
- no minimum balance
- no monthly fees
- easier to contact them in Massachusetts than elsewhere
Where To Open an HSA Account
You can open HSA Accounts at banks, credit unions, or investment firms, but which one is best? It depends mostly on if you are planning on investing your money or earning interest with an interest-bearing account.
You can open interest-bearing accounts at banks, credit unions, or investment brokers alike.
Usually, with credit unions, you can get lower fees and higher APY, but it’s always best to check with the individual financial institution.
If you want to invest, the most appropriate channel is probably an investment broker. That said, banks and credit unions can also offer this feature.
There are so many HSA Providers (also called HSA Administrators or HSA Custodians) that it can be hard to choose.
My advice is to make sure you choose a provider that makes it easy for you to manage your money independently and make withdrawals or add money whenever you need to without complicated processes.
Pros & Cons
HSA Accounts have many benefits, on top of being triple tax-free. That said, just like all other accounts, HSA accounts have some disadvantages as well.
- No income limits: Anyone can open HSA healthcare savings account regardless of their income. No one will be denied this tax-advantaged account, even high earners.
- Choice: There are many more HSA providers than IRA, so you can choose the one you like best. They all offer tax benefits.
- Flexibility: You can withdraw money even for a medical expense that happened many years prior or file a tax return, and from age 65, you can withdraw HSA money from the account for any reason, not only health-related, you’ll only need to pay a regular income tax. It’s a flexible spending account (FSA).
- Penalties: If you want to withdraw money for reasons that aren’t healthcare-related and under 65, you will have to pay a penalty of 20%. Fortunately, what counts as healthcare has expanded over the years and even more with COVID. It’s best to always check before assuming you’ll have to pay for a service – you might be positively surprised.
- Contribution limits: There are limitations on who is allowed to contribute to an HSA Account. Only people with a high deductible health plan (HDHP) can take advantage of this account.
Frequently Asked Questions
Which banks offer the best HSA accounts?
There is a large variety of HSA accounts on the market. We’ve covered the best accounts above, so you can find out the main characteristics of each one and choose which one is best for you.
Some recommendations I would give are:
- Further: for its high-yield HSA plans. It offers variety and a very high APY.
- Lively: because it has no fees, is FDIC insured, and… it might just be the best overall!
These are only two among others. If you want more info, read above or go and check the financial institution’s website before making a final decision.
You could also read IRS publications to understand HSA accounts from official sources better.
Can I open an HSA at any bank?
Most banks and credit unions have at least one HSA account option, so the answer is, most likely – yes. I don’t know which bank is your preferred one, though, so I can’t say for sure.
If you go online, most financial institutions indicate which account options they have, so you can find out if they offer HSA accounts. If they don’t, contact your bank online, by phone, or by popping into a branch.
Another option is to ask your employer. Employers, especially from large businesses, are usually familiar with HSA account options.
They could even tell you they offer one (so you won’t have to pay for a monthly fee if there is one), or at least they might be able to recommend a good option in case your bank doesn’t offer an HSA account.
Does Chase offer HSA accounts?
Yes, Chase offers a tax-advantaged Health Savings Account that you can use with a high-deductible health plan (HDHP).
You can use it to pay for qualified medical expenses such as doctor appointments, pharmacy bills, dental bills, medicare, vision care, and much more.
Chase claims that their account can save you from 20% to 30% every year on medical costs.
I suggest you talk to the bank’s representative or have a look at Chase’s website online to know all of the details of their HSA plan.
Does Health Savings Administrators still offer HSA accounts?
In December 2021, Health Savings Administrators was acquired by HealthyEquity.