HSA Bank HSA review
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- Choose from semi-guided or self-directed investing
- Wide range of investment options
- One of the oldest HSA providers
About HSA Bank
HSA Bank is a provider of health accounts. It offers Health Saving Accounts (HSA), Flexible Spending Accounts (FSA), and Health Reimbursement Arrangements (HRA) to individuals, directly or through employers and partner companies. HSA Bank is a division of Webster Bank, N.A, which is a subsidiary of Webster Financial Corporation.
What are the benefits of HSA Bank’s HSA?
Choose from self-directed or semi-guided investing
There are two ways to invest through HSA Bank: a self-directed approach through TD Ameritrade or a semi-guided approach through Devenir, LLC, a Registered Investment Advisor (RIA) that HSA Bank has partnered with. You could choose whatever you want to invest in through the self-directed approach.
If you’re not sure what to invest in and want some automation to help you stay on track, you could choose the semi-guided approach. Through this option, you could choose from pre-selected funds that Devenir investment advisors has researched and enable automatic rebalancing to have your investments adjusted to ensure your investments continue to align with your desired asset allocation.
Wide range of investment options
There are many investment options available for HSA Bank’s HSA through its partners. Through TD Ameritrade, you may invest in individual stocks, bonds, ETFs, CDS, over 550 commission-free ETFs, and more than 13,000 mutual funds. Through Devenir, you may invest in funds selected by Devenir investment advisors.
What’s HSA Bank’s interest rate?
HSA Bank’s interest rate for any uninvested funds vary depending on your HSA balance. Here’s the breakdown as of May 1, 2020:
|Less than $5,000||0.05%|
|$5,000 to $24,999.99||0.15%|
|$25,000 or more||0.30%|
Note: while we aim to keep our reviews updated, we cannot guarantee that the rates information here is the latest. Refer to HSA Bank's site for the latest information.
Drilling into HSA Bank’s fees
HSA Bank charges a maintenance fee of $2.50 per month when your account balance is under $3,000. If your account balance is $3,000 or more, HSA Bank waives the $2.50 fee, and you do not have to pay any maintenance fee.
HSA Bank charges additional fees when you invest. There are two ways to invest through HSA Bank: a self-directed option through TD Ameritrade or a semi-guided option through HSA Bank’s partner, Devenir. HSA Bank charges a monthly fee of $3.00 for the self-directed option. HSA Bank waives this fee if you keep at least $5,000 in cash in your HSA account (i.e. don’t invest the $5,000). For the semi-guided option, Devenir charges an annual fee of 0.30% of your investment amount, invoiced quarterly with a minimum fee of $1.50 per quarter.
If you decide to invest in ETFs and/or mutual funds through TD Ameritrade or Devenir, the funds generally come with fund fees (aka expense ratios). These fees are for managing a fund. These management fees vary depending on the fund and is a percentage of your investments. For example, for a $1,000 investment, a 0.15% fund fee is $1.50. The fees are automatically deducted by the fund.
HSA Bank integrates with TD Ameritrade’s self-directed brokerage platform if you want to invest your HSA savings. Thus, trading fees are going to be based on what TD Ameritrade charges. Online U.S. stock and ETF trades are free. Fees for trading mutual funds depend on the fund; there are some that don’t charge any commission fees for trading. Bond and CD commission fees are already included in the bond’s and CD’s net yields (interest or dividends earned).
HSA Bank does not charge a fee for spending your HSA amount.
Account transfer fees
HSA Bank does not charge a fee for transferring your outside HSA to HSA Bank.
HSA Bank charges a $25 fee to close your HSA account. It also charges a $1.50 fee for printed statements; you may avoid this fee by electing to receive just e-statements.
Note: while we aim to keep our reviews updated, we cannot guarantee that the fee information here is the latest. Refer to HSA Bank's site for the latest information.
How easy is it to do things at HSA Bank?
Opening a HSA Bank HSA
You may open a HSA Bank HSA online. To enroll in an account, you’ll be asked to provide standard personal information, such as contact information, Social Security number, and such.
Spending your HSA Bank HSA funds
There are a few ways to spend your HSA funds. You may use a debit card that HSA Bank will send to you after you enroll. There is a $5,000 daily spending limit at doctor offices and hospitals and a $3,000 daily limit at other eligible health merchants (e.g. grocery store). You may also pay for medical expenses by using BillPay, writing a check (note: there may be a fee for ordering checks), or paying out of pocket and then reimbursing yourself through BillPay, writing yourself a check, or withdrawing money from the debit card at an ATM.
Investing your HSA Bank HSA
You may begin investing through HSA Bank only once you have a minimum of $1,000 in your HSA Bank cash account. Also, only HSA funds above $1,000 in your HSA Bank cash account may be invested. There are two ways to invest through HSA Bank: a self-directed option through TD Ameritrade (TD) or a semi-guided option through Devenir, LLC.
To invest through TD, you may enroll in a TD account on the HSA Bank site. Once you’ve enrolled, you may log into your TD account through the TD site to start trading. Note: for IRS reporting purposes, HSA funds you want to invest must first be transferred to your HSA Bank HSA and should not be directly transferred to TD.
Through TD, stock and ETF trades are executed throughout the day when the market is open between 9:30 a.m. ET to 4 p.m. ET. TD also offers three extended-hour trading sessions during weekdays for its clients outside of market hours. There’s one before the market opens from 7 a.m. until 9:28 a.m. ET, one after the market closes from 4:02 p.m. to 8 p.m. ET, and one overnight starting at 8 p.m. ET. This means TD offers almost a 24-hour trading cycle. Note: the difference between the price at which you sell and the price at which you buy tends to be wider during outside hours and there are fewer shares traded, so only the most experienced traders might want to consider trading outside of market hours.
All Mutual funds, regardless of the firm, are executed once a day after the market closes at 4 p.m. ET. If you buy or sell shares of a mutual fund, your trade will be executed at the next available share price for the fund, or net asset value (NAV), which is calculated after the market closes and typically posted by 6 p.m. ET.
The other way to invest your HSA Bank funds is through a semi-guided option. HSA Bank partners with Devenir, LLC, a Registered Investment Advisor (RIA), for this. Devenir helps research and select investment options that you can invest in. Through this approach, you fill out some questions (e.g. age, risk tolerance) online and a recommended asset allocation is provided. Then, you may choose the funds (among the ones Devenir pre-selected) you want to invest in and set the schedule for how often you want your account to be automatically re-balanced, or adjusted, to align with your asset allocation.
Transferring your outside HSA to HSA Bank
After you open a HSA Bank HSA, you may initiate a transfer of your outside HSA to HSA Bank by completing a transfer request form and mailing it to your current provider. Once you initiate the transfer, your current HSA provider will send a check to HSA Bank. HSA Bank will then deposit that check into your HSA account. Note: While HSA Bank does not charge a fee for the transfer, your current HSA provider might.
How is your HSA protected at HSA Bank?
HSA Bank is a division of Webster Bank, N.A., Through Webster Bank, your HSA savings are eligible for The Federal Deposit Insurance Corporation (FDIC) insurance. FDIC is a U.S. government agency that insures cash deposits at FDIC member banks, generally up to $250,000 per account.
If you invest any of your HSA savings through HSA bank, then you’ll be investing through TD Ameritrade or Devenir. If TD Ameritrade or Devenir financially fails (i.e. goes bankrupt), your investments are insured by the Securities Investor Protection Corporation (SIPC). Each “separate capacity” account is protected up to $500,000 with a limit of $250,000 for uninvested cash. For more details on what’s a “separate capacity” account, visit the SIPC site.
The SIPC is a U.S. government creation but not an agency of the U.S. and insures all brokerage accounts up to $500,000. SIPC is funded by all of its member broker/dealers. In some cases, it also protects against unauthorized trading or theft in the account. Market losses and promises of investment performance are not covered.