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What Are the Best HSA Account Providers?

With the ever increasing costs of health insurance premiums, and exorbitant deductibles and copayments, many people have started turning to health savings accounts (HSAs) to help cover a portion of their medical expenses. But what exactly are the best HSA account providers, you may ask.

HSA accounts have become a popular option in the health marketplace, increasing by at least 25% in the last year. However it seems they are currently still being underutilized.

If you are wondering if an HSA account is right for you and your family, continue reading. We’ll outline what an HSA account is, how it can help you save money, and we’ll provide you with the best HSA account providers to choose from. 

Quicklook: Best HSA Account Providers

Table of Contents

6 Best HSA Account Providers

Now that we’ve explored what to look for in an HSA account, and the reasons why you should open one, it’s time to explore the best HSA account providers.

The following six providers have proven themselves to be top-notch for the service they provide to individuals, families, and employers. 

Lively

Best For No Fees

Lively

While this HSA provider has only been around since 2016, it quickly has become one of the best options on the market. Lively offers no fees for their HSA accounts.

That means no fees to open an account, transfer funds, or any fees of any kind! It allows customers to have a quick and easy way to pay for their medical expenses, without worrying about surprise charges. 

Overall Review: Straightforward. Easy to use. No paperwork required to get started, just link to your bank!

Features: 

  • Fully online system with mobile app for tracking funds.
  • Trustee-to-trustee transfers.

Benefits

  • Investment options through TD Ameritrade. 
  • No fees.
  • Free debit card.
  • Superior customer service.

Disadvantages

  • Newer company with only 5 years of experience.
  • One investment solutions has a 0.50% annual fee.

Account Minimums: No 

Fees Associated: No fees.

Investment Options: Funds can be invested through a self-directed brokerage account. This is free to access through TD Ameritrade. You also have the option to have a guided portfolio, although it comes with a 0.50% annual fee, from Devenir. 

Investment Limit: 0

Interest Rate: 0.01%

Sign up with Lively here

Optum Bank

Best For Investment Management

Optum Bank

This is the top rated HSA account provider for individuals who are looking to use it as an investment tool. Optum provides clients with a range of investment tools through Betterment, which can help improve the long-term impact of their health savings account.

Unfortunately, with the perks of its personal finance application, the largest downside to opening an Optum HSA account is the fees.

Overall Review: Fantastic investment management tool. Higher fees than other HSA providers.

Features: 

  • Personal capital finance app.
  • Automatic portfolio rebalancing.

Benefits:

  • 24/7 live customer service.
  • Extensive investment tools.
  • Easy to manage online account.
  • Online receipt storage.

Disadvantages

  • More fees compared to other HSAs.
  • High minimum balance required to start investing.

Account Minimums: No

Fees Associated: 

  • Monthly account fee for accounts with balances under $3,000.
  • Check order fee.
  • Excess contribution fee.
  • Wire fee.
  • Non-sufficient funds fee.
  • Stop-payment fee.
  • Research fee.
  • Official check fee.
  • Document copy fee.
  • Check processing (or ACH) fee.
  • ATM Fee.
  • Printed statement fee.

Investment Options: With an Optum HSA account you can invest through Betterment or Schwab. You will be charged a 0.03% monthly brokerage fee.

Investment Limit: $2,000

Interest Rate: Up to 0.01%.

Sign up with Optum Bank here

HSA Authority

Best For Families

HSA Authority

Brought to you by Old National Bank, the HSA program — HSA Authority — offers flexible ways to invest your funds with their convenient online system.

Their portal makes it easy to have multiple members of your family complete tasks, like making contributions or paying bills on behalf of the family. It’s the best option for people who are looking to co-manage their account.

Overall Review: Great online management functionality. Perfect for families.

Features: 

  • Mobile deposits.
  • Portal lets account holder share and delegate tasks.

Benefits

  • Easy to open and to fund.
  • Shared account for mobile deposits, bill pay, text banking, and more.
  • No-stress access to your funds with debit card, checks, and online bill pay options.

Disadvantages

  • Annual fee of $36 for investment account.
  • No investment options until you have $1,000 or more saved.

Account Minimums: No minimum balance.

Fees Associated: 

  • Investment fee.
  • Paper enrollment fee.
  • Paper statement fee.
  • Account closing fee.

Investment Options: 30+ non-load mutual funds.

Investment Limit: $1,000

Interest Rate: Up to 0.5%.

Sign up with HSA Authority here

HealthEquity

Best For Employer Sponsored HSA

Health Equity

HealthEquity has zero fees or account minimums. Pair that with its easy all-in-one solution that has a quick set up and you’ll see why it’s the best HSA account provider for employers.

It allows business owners to keep all their benefits in one place, making signing up easy for employees. 

Overall Review: Great for employers. Mobile friendly app easy to use for employees.

Features: 

  • Endorsed by The Dave Ramsey Show.
  • Nearly two-dozen Vanguard mutual funds.

Benefits

  • Easy to use mobile app.
  • No account minimums or management fees.
  • Three investment options to choose from.

Disadvantages

  • Minimum balance required to invest in mutual funds.
  • Annual fee for investments.

Account Minimums: No

Fees Associated: 

  • Monthly investment administration fee of 0.03%, not to exceed $10.
  • Advisor plans monthly fee is 0.05%, not to exceed $15.

Investment Options: Three investment options to choose from:

  • Cash account – standard, low interest rate.
  • Yield Plus – higher interest rate.
  • Mutual funds.

Investment Limit: $500

Interest Rate: Up to 1.5%.

Sign up with Health Equity here

Fidelity HSA

Best For Investment Options

Fidelity

As a financial institution, Fidelity is the top choice for HSA accounts that have a plethora of investment options. The set up process is quick and easy, and it also comes with no fees!

With their in-house investing options, Fidelity waives investment minimums and transaction fees, meaning you can invest in all investment vehicles like stocks, bonds, ETFs, CDs, mutual funds, and more. 

Overall Review: Extensive investment options. No fees. 

Features: 

  • Numerous investment options to choose from.
  • History of success. Founded in 1946.

Benefits

  • Account access with debit card.
  • Choice between fund types.
  • Manage other Fidelity accounts in single dashboard.
  • No commission on trades.

Disadvantages

  • Annual fee for employer-sponsored HSAs.
  • Some HSA specific mutual funds have high expense ratios.

Account Minimums: No

Fees Associated: 

  • Annual fee for employer-sponsored HSAs.

Investment Options: Fidelity offers three investment options:

  • Self-directed brokerage (invest in over 10,000+ mutual funds, stocks, bonds, ETFs, CDs)
  • HSA-Specific mutual funds
    • Fidelity Health Savings Fund
    • Fidelity Health Savings Index Fund

Investment Limit: 0

Interest Rate: 0.01%

Sign up with Fidelity here

Further 

Best For Competitive Interest Rates

Further

Using the Charles Schwab brokerage platform, Further HSA provides individuals with a great platform to make investments. They boast the highest interest rates of all the HSA options on the list, although they do charge an annual fee and monthly maintenance fee.

Their mobile platform makes it easy to manage an HSA plan while simplifying the claims process.

Overall Review: Streamlined HSA administration. Multiple investment options to choose from.

Features: 

  • Charles Schwab investment platform.
  • Individual, family, and employer-sponsored options.

Benefits

  • Can oversee employee reimbursement accounts and health savings accounts in one place.
  • High interest rates.
  • Simplified claims and reimbursement process.

Disadvantages

  • Monthly and annual fees.
  • Investment options have varying fees.

Account Minimums: No

Fees Associated:

  • Monthly administrative fee.
  • Yearly investment fee.
  • Broker assisted fee.

Investment Options: The self-directed brokerage account provides access to 30 mutual funds. Using the Charles Schwab brokerage platform you’ll have access to 2,000+ ETFs, stocks, and bonds, and 2,500 mutual funds.

Investment Limit: 

  • $1,000 self-directed brokerage account.
  • $10,000 Charles Schwab brokerage platform.

Interest Rate: Up to 0.70%

Sign up with Further here

What Is an HSA Account?

An HSA account is a health savings account that makes your tax-free contributions work for you. It’s a tool that will help you save funds to pay for out-of-pocket medical expenses — like copayments and deductibles.

But, the reimbursement doesn’t stop there. An HSA account allows you to utilize your pre-tax money for healthcare expenses like prescriptions, dental cleanings, eye exams and glasses.

You can even use the funds for over-the-counter medications and hygiene products.

How Does a HSA Work? 

There are two ways that you can make contributions to an HSA. The first is through your employer who deposits a portion of your income into the account — before taxes are calculated.

You do not have to pay income tax on this money, instead it is transferred into the account and the remaining portion of your income is calculated as taxable income. The second way you can set up an HSA is through an individual (or family) account. At the end of the year, you can deduct the contributions that you made through your income tax return. 

Whether it be individual or through your employer, a HSA account can only be created if you or your employer has a high deductible health plan or a HDHP. The IRS states a HDHP is any health plan with a deductible of at least $1,400 as an individual or $2,800 as a family.

In 2021, the maximum amount that you can contribute to an HSA is $3,600 for an individual or $7,200 for a family. However, those numbers are increasing next year. In 2022, you will be able to contribute $3,650 as an individual or $7,300 to a family health savings account.

What’s more, if you are over the age of 55, you can contribute an additional $1,000 annually. Once you reach 65, the additional contributions are no longer able to be made. 

As you incur medical expenses, you can use your HSA to fund the transactions.  

HSA Benefits 

When you contribute to a health savings account, you will see expansive benefits. As we continue to see the rising costs of healthcare, these benefits help you stash money, tax free, to be utilized when you need it. 

  • Triple tax free: You contribute to your HSA account with pre-tax dollars. Your savings can then grow through investments, once again tax free. Finally, as you withdraw the money, the funds are not taxed if you are utilizing them for qualified health care expenses.
  • Flexible withdrawals: Use your money when you need it. With HSA’s you are able to withdraw funds for qualified medical expenses, even if they were incurred decades before! Additionally, if you do not utilize the funds within the calendar year, you can leave them in your account to grow. This is a great way to save for expensive healthcare costs that could arise in the future. 
  • No income limit: With some tax-advantaged accounts, high earners are phased out. An HSA does not have any income limitations, making them available to people in all income brackets.

HSA Disadvantages 

While all the benefits seem too good to be true, it is important to take a look at the potential disadvantages you might come across when utilizing a health savings account. 

  • Strict eligibility: Not everyone is eligible for an HSA plan. They are only available to individuals and families that have a high deductible health plan (HDHP). Additionally, if you are a dependent on someone else’s tax return, you cannot establish an HSA on your own.
  • Significant withdrawal penalties for using funds not towards health related expenses: While having a tax-advantaged account is a great benefit, if you do not utilize the money for the intended purpose, in this case qualified health care expenses, you will incur a penalty. This penalty is 20%, so be cautious on what you utilize the funds for. The good news is, the IRS’s definition of a qualified medical expense is pretty expansive.
  • Not all places accept HSA cards: When paying for qualified medical expenses, the ease of swiping your HSA card makes the process simple and efficient. However, some stores and medical complexes do not accept HSA cards. Instead, you will be required to pay out of pocket for the expense, then submit your receipt to be reimbursed from your HSA provider. 

Do I Qualify for an HSA?

To meet the eligibility requirements for an HSA you must meet the following:

  • Be covered under a high deductible health plan (HDHP)
    • Minimum annual deductible of $1,400 for individuals or $2,800 family
  • Have no additional health coverage
  • Not be enrolled in Medicare or TRICARE
  • Must not be claimed on anyone else’s tax return
  • Not have a health reimbursement account (HRA) or health care flexible spending account (FSA)

What Makes a Good Health Savings Account?

When you’re looking for the best HSA account providers, you should look for the following features.  

Low or Minimal Fees

Depending upon the HSA account provider that you select, the fees may vary drastically. Some providers charge investment fees, maintenance fees, pre-transaction charges, and even paper statement fees.

Additionally, other accounts may charge a fee to even open the account. Be sure you understand the fees that your selected provider charges before you begin.

Fees can add up, which can have an overwhelming impact if you aren’t careful. 

Investment Options

If you want to get the most out of your health savings account, you will want to earn interest on your money. Many HSAs offer the opportunity to earn interest, like with your bank savings account.

But, this percentage is typically small. If you find an HSA that has an investment option, you can invest your savings into a mix of stocks, bonds, mutual funds, and other investment vehicles that can help grow your money.

Easy to Use and Set Up

Convenience is an extremely important factor in setting up and utilizing your HSA account. If you have too many hoops to jump through to set up or utilize the account, you should continue looking for another option. 

Picking the Best HSA Account Provider 

Health savings accounts can help you grow your tax-deferred money for times when you need it the most. Doctors appointments, hospital bills, and even trips to the dentist can sneak up on you when you least expect it.

Having funds in an HSA can give you peace of mind to cover those expenses, all while saving money on your taxes! If you’re still unsure of which option is the best for you, turn to your financial advisor.

They can help you determine who has the best HSA accounts, and guide you to the right selection. 

Frequently Asked Questions

How does a health savings account (HSA) help people save money? 

Health savings accounts are used to save money for future medical needs. The money deposited is not taxed, and is eligible to be invested, which is also not taxed. As long as the funds are used for qualifying medical expenses, they will not be taxed. Meaning HSAs offer triple-tax benefits.

What can you use a health savings account for?

You can utilize your HSA to pay for healthcare, vision, and dental expenses for yourself, your spouse, and your dependents. The list for qualified expenses includes everything from toothpaste and bandages to emergency medical bills. 

Can you cash out a health savings account?

You are able to cash out, or withdraw funds, from your health savings account at any time, but you will incur a 20% penalty if they are not used for medical expenses. 

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#1 Rated Health Savings Account (HSA) Provider - Lively!

The Modern Health Savings Account. Lively helps people prepare for tomorrow by making smart decisions about finances and healthcare today.