Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
HSA Custodian Research
Old 01-13-2006, 12:05 PM   #1
 
Posts: n/a
HSA Custodian Research

I'll be opening my HSA account next week.* The choices I'm looking at so far are these:

HSA Bank:

I could put the money in any mutual fund, although this involves going through a HarrisDirect brokerage.* *This seems messy, and I've been on hold for HarrisDirect for about 10 minutes now.*

Saturna

I could put the money in one of their five or so mutual funds.

Patelco

They offer a 5.00% (5.12% APY) account, and the only fee is the setup fee of $20.* That rate changes monthly.


Code:
	Setup	Annual	Exp (4K)	TransFee	Total
Sterling	35	30	20	0	85
HSA Bank	18	30	0	19.95	67.95
Saturna	0	0	48	0	48
Patelco	20	0	0	0	20
HSA Admin	20	35	24.5	0	79.5
Any thoughts on this?
__________________
  Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: HSA Custodian Research
Old 01-13-2006, 12:19 PM   #2
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: HSA Custodian Research

How difficult is it to roll the money to somewhere else?

5% seems pretty attractive...
__________________

__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 12:22 PM   #3
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,077
Re: HSA Custodian Research

T-Al, I've been looking at HSA's also as that's the way I may be going once Cobra runs out in November. Of the three options you listed, my personal preference would probably be Patelco. Yes, you have no choice for your investments, but the fact that Patelco is a CU will probably lessen the number and severity of service fees compared to what you might pay in more profit-driven banks. And 5+% isn't too shabby.

That said, Patelco is a very large CU, and my experience working for a company that was a supplier to CU's and banks was the larger the CU, the more "bank-like".
__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 02:43 PM   #4
 
Posts: n/a
Re: HSA Custodian Research

Right, I generally stay away from banks.

They said there are no fees to roll it over to a different HSA administrator.

Here's a question on Patelco: What's to stop them from dropping the interest rate to 2% next month?
__________________
  Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 02:47 PM   #5
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
brewer12345's Avatar
 
Join Date: Mar 2003
Posts: 16,391
Re: HSA Custodian Research

Quote:
Originally Posted by TromboneAl
Right, I generally stay away from banks.

They said there are no fees to roll it over to a different HSA administrator.

Here's a question on Patelco:* What's to stop them from dropping the interest rate to 2% next month?
That fact that you could roll the money over any time you like. That's about it.
__________________
"There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest have to pee on the electric fence for themselves."



- Will Rogers
brewer12345 is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 05:13 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: HSA Custodian Research

Whoa!

"This institution is not federally insured, and if the institution fails, the Federal Government does not guarantee that depositors will get back their money. Accounts with this institution are not insured by any state government."

A musician in town lost his HSA savings when his trustee went bankrupt. Be careful. It can happen.
__________________
eridanus is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 05:29 PM   #7
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
REWahoo's Avatar
 
Join Date: Jun 2002
Location: Texas Hill Country
Posts: 42,077
Re: HSA Custodian Research

Quote:
Originally Posted by eridanus
"This institution is not federally insured, and if the institution fails, the Federal Government does not guarantee that depositors will get back their money. Accounts with this institution are not insured by any state government."
Seems Patelco, who was insured by the FDIC, withdrew from federal coverage in 2002 and now accounts are insured by a private company:

http://www.bizjournals.com/sanfranci...wscolumn3.html

__________________
Numbers is hard

When I hit 70, it hit back

Retired in 2005 at age 58, no pension
REWahoo is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 06:45 PM   #8
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: HSA Custodian Research

Al,

You based the expenses on 4K, but are you planning to spend from the account, or let it accumulate the max each year?

Also, in the expenses for Saturna, you might also need to consider hidden expenses. I used to add the ER and turnover ratio together as a first approximation of total expenses, though it can depend on market cap and investing style.

Thanks for keeping us up to date on your HSA search.
Still on my to do list.
__________________
lazyday is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-13-2006, 06:56 PM   #9
 
Posts: n/a
Re: HSA Custodian Research

I plan to put the money in there and not touch it until age 65 or later.

The lack of FDIC insurance is noteworthy. Of course Saturna isn't insured, and neither is , for example, Vanguard. Why would I be more at risk at Patelco?

__________________
  Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 01:09 AM   #10
Thinks s/he gets paid by the post
 
Join Date: Jan 2004
Posts: 2,049
Re: HSA Custodian Research

Vanguard is insured by the SIPC.
__________________
eridanus is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 08:24 AM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
cute fuzzy bunny's Avatar
 
Join Date: Dec 2003
Location: Losing my whump
Posts: 22,697
Re: HSA Custodian Research

Quote:
Originally Posted by TromboneAl
I've been on hold for HarrisDirect for about 10 minutes now.
Remember...your presales customer support level and response time are usually a lot better than your postsales ones...
__________________
Be fearful when others are greedy, and greedy when others are fearful. Just another form of "buy low, sell high" for those who have trouble with things. This rule is not universal. Do not buy a 1973 Pinto because everyone else is afraid of it.
cute fuzzy bunny is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 09:00 AM   #12
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: HSA Custodian Research

Quote:
Originally Posted by TromboneAl
I plan to put the money in there and not touch it until age 65 or later.
So, as you keep contributing, and if assets appreciate, the excess expenses over VG multiply.
When I posted last time, I may have misread the $48 in your table as annual expenses coming from the ER of the mutual funds at Saturna... is that a transaction fee?

Quote:
Originally Posted by TromboneAl
The lack of FDIC insurance is noteworthy. Of course Saturna isn't insured, and neither is , for example, Vanguard. Why would I be more at risk at Patelco?
I could be wrong, but I think most CDs are FDIC (or credit union near-equivalent) insured, so you have the US gvnt backing you. Maybe not quite as safe as treasury bonds, but pretty safe.
An uninsured CD, I'd put much less faith into.
But, I don't know much about fixed-income.

Maybe Swensen's book has influenced me too much, but here's my perspective:
If I'm going to take the long run hit on returns (relative to stocks) by buying fixed income, I want my money to be safe. Unless the US government falls, I should be paid.

An uninsured money market fund or cd may seem safe, but if a 1 in 100 year event would make you lose all your money, then an extra .5% yield isn't compensating you for the risk.
(Assuming:
-a 1 in X chance per year that US government fails,
-and an additional 1 in 100 chance per year that US government doesn't fail, but you lose all your money in the uninsured account.)

If you think I'm being paranoid, think about the long-term-capital-mgt fiasco a few years ago, and think of what could happen over the next 100 years. What if you're unlucky, and the "big one" comes in the next 10?
__________________
lazyday is offline   Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 10:13 AM   #13
 
Posts: n/a
Re: HSA Custodian Research

Quote:
I may have misread the $48 in your table as annual expenses coming from the ER of the mutual funds at Saturna... is that a transaction fee?
Yes, I believe that's from the 1.2% expense ratio. I made that part of the chart a few months ago, so I don't remember for sure.


__________________
  Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 10:33 AM   #14
 
Posts: n/a
Re: HSA Custodian Research

Current thinking:

With HSA Bank I'd have to endure either super low interest rates or high complexity and poor customer service.

I'd go with Patelco, but I'd have the concern of possibly inadequate insurance.

With Saturna, I'd have to live with a high expense ratio (1.2 % vs. .6% at Vanguard).

So, I'm leaning towards Saturna, using their Sextant International Fund.

What are the pitfalls of working with a small company like that?
__________________
  Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 10:54 AM   #15
 
Posts: n/a
Re: HSA Custodian Research

Here are some more findings, for others who are investigating this:

1. If you are using www.hsainsider.com to find HSA companies, note that the companies displayed will vary depending on your zip code, although I see no indication that you cannot use any of these national companies.

2. Saturna is the only company that I've found so far that let's you simply put the funds into a mutual fund without having to go through a third-party brokerage.

3. Almost every HSA custodian has extremely low interest rates (such as .75%) until you have, say, $15,000 in your HSA account (then you may get 3.82%).
__________________
  Reply With Quote
Re: HSA Custodian Research
Old 01-14-2006, 11:10 AM   #16
 
Posts: n/a
Re: HSA Custodian Research

Just found a company that lets you easily invest your money in Vanguard funds: www.hsaadministrators.com.*

They have a setup fee of $20, an annual fee of $35 ($60 for a family HSA), and a .125% of balance fee.* So for the first year, figuring $4000 and a Vanguard fund with a .6% ER, the total fee would be $79.50.
__________________
  Reply With Quote
Re: HSA Custodian Research
Old 01-17-2006, 11:14 AM   #17
 
Posts: n/a
Re: HSA Custodian Research

Just called HSA Administrators, and got through to a very knowledgeable person right away. No phone menu.
__________________
  Reply With Quote
Re: HSA Custodian Research
Old 03-05-2006, 12:05 AM   #18
Confused about dryer sheets
 
Join Date: Mar 2006
Posts: 5
Re: HSA Custodian Research

So who did you end up going with? (Sorry if it's mentioned in another thread)

I've got a Blue Cross HDHP (Options Blue) and plan to get an HSA setup in the next couple of weeks (I've put it off for to long).* I basically see it as a second IRA.


Patelco seems nice, but the insurance thing seems a bit scarry.* HSA Administrators is nice in that they offer Vanguard funds (but ouch on the expense add on) of course that's not insured either, but I'm a big Vanguard fan.*They seem the best of the three places I found offering Vanguard funds. The place BCBS of MN uses has no fees once the balance is $750, but it's got crappy returns (.5%, 1%) until the balance gets big.

I really wish someone like Vanguard would offer something directly.


Thanks,
Brian
__________________

__________________
~Brian
AnemicOak is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Interesting HSA Distribution Rule kramer Health and Early Retirement 28 05-10-2007 02:00 PM
Why so few HSA accounts offered? safari Health and Early Retirement 6 01-03-2007 11:27 AM
HSA Summary TromboneAl FIRE and Money 96 12-28-2006 08:28 PM
Recommend an HSA Custodian TromboneAl FIRE and Money 7 12-01-2005 11:13 AM

 

 
All times are GMT -6. The time now is 06:02 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.