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HSA accounts
Old 12-08-2014, 01:30 PM   #1
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HSA accounts

Asked Vanguard and they referred me to this page:

https://personal.vanguard.com/us/wha.../healthsavings

Which in turn links to this site:

Vanguard® Funds - Health Savings

From an earlier thread about HSA administrators:

Recommend an HSA administrator

Sounds like nobody else is investing in VG funds through healthsavings.com?
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Old 12-08-2014, 01:41 PM   #2
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Quote:
Originally Posted by explanade View Post
Asked Vanguard and they referred me to this page:

https://personal.vanguard.com/us/wha.../healthsavings

Which in turn links to this site:

Vanguard® Funds - Health Savings

From an earlier thread about HSA administrators:

Recommend an HSA administrator

Sounds like nobody else is investing in VG funds through healthsavings.com?
That's HSA Administrators. IIRC, popular around here.
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Old 12-08-2014, 07:25 PM   #3
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I use HSA Administrators to invest in Vanguard funds in my HSA. So far so good.
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Old 12-09-2014, 07:01 AM   #4
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I use HSA Administrators to invest in Vanguard funds in my HSA. So far so good.
+1 Their fees are annoying but not a big deal in the whole scheme of things.
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Old 12-09-2014, 08:39 AM   #5
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Another thread linked an article evaluating HSA's for people who are using them as investments. Best HSA Provider for Investing HSA Money with an update Elfcu HSA Still The Best Despite New Wire Transfer Fee . It says that Eli Lilly FCU is the lowest cost, though if you want to keep in one fund, Saturna Capital can be even lower. HSA Bank is another option.

Fees vary a bit depending on your balance for some and # of transactions or transfers to the investment account for others, but for me I was looking at:
  • ~$100 for HSA Administrators
  • $66 for HSA Bank or tie up $5000 in a 0.3% account
  • $24 for EL FCU plus $36 or tie up $2500 in a 1% account, plus a one-time $5 fee/donation to join the CU
  • $15 for Saturna Brokerage HSA per trade
Investing in VG funds looks to be an option for all. In fact, HSA Administrators looked to be the most restrictive as they only allowed a subset. The others go through TD Ameritrade so any fund or stock would appear to be available.

I haven't yet done full due diligence to verify there are no other costs or limitations, or any extraordinary fees to eventually get your money out. I am going to wait until January when I make my contribution and then move out of my no cost 1.5% credit union account.
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Old 12-09-2014, 10:04 AM   #6
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I've looked at a few of these firms for HSA's. Since all I can do for my HSA is to do the one-time rollover of $4350 from my IRA, I've decided to use my local credit union. Yes, the interest is minimal, but no fees. I figure that I will probably use up this cash in the next five years or so. Wanting to handle a $4000 investment account is not a good use of my time.
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Old 12-09-2014, 10:24 AM   #7
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I use the default HSA provider for my Anthem/BCBS insurance. It's BenefitWallet and they offer a couple of Vanguard funds (plenty of others as well). There are fees (all HSA have higher than I'd think is normal fees, but since they all have these fees, there isn't much you can do about it).

They make me keep $1500 in the "checking account" and I keep the rest in VTSMX (Total Stockmarket).

If/when you need to use the funds for medical spending they offer a debit card.

These are their fees/rates:

APY on checking: 0.15%
Monthly service charge: $2.95
Paper statement per month: $1.25
2nd Debit card (1st is free): $5.00
2nd Checkbook (1st is free): $10.00)

Nothing too bad really.
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Old 12-09-2014, 11:41 AM   #8
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I've been happy with HSA Administrators.

As for the Vanguard funds being just a subset, for me the choices were broad enough at 22 funds. Many of these are available in the HSA as Admiral funds with small amounts invested which is nice for those of us who don't have Admiral level funds available for investing outside of the HSA.
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Old 12-09-2014, 12:01 PM   #9
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Good point on the Admiral funds with HSA Administrators. I'll have to remember to factor that in to the fee costs when I make my decision next year.
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Old 12-09-2014, 12:32 PM   #10
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Originally Posted by mpeirce View Post
I use the default HSA provider for my Anthem/BCBS insurance. It's BenefitWallet

These are their fees/rates:

APY on checking: 0.15%
Monthly service charge: $2.95
Paper statement per month: $1.25
2nd Debit card (1st is free): $5.00
2nd Checkbook (1st is free): $10.00)

Nothing too bad really.
The monthly service charge would be a concern to me. HSA Bank requires a higher minimum ($5,000 and pays .20%), but then there is no monthly service charge.

Do you have an option to avoid a service charge? It looks like the monthly service charge more than eats up what you can earn on the checking account. You need to give them about $35 year in service charges, and they give you $2.40 in interest. Are you making up the costs in your investments?

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Old 12-09-2014, 01:34 PM   #11
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I use Wells Fargo HSA, they wave the monthly service fees as long as your account balance (savings and/or investment funds) is over $5k. They don't offer Vanguard funds but the funds they do offer are adequate for my needs.
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Old 12-09-2014, 01:44 PM   #12
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I've been happy with HSA Administrators.

As for the Vanguard funds being just a subset, for me the choices were broad enough at 22 funds. Many of these are available in the HSA as Admiral funds with small amounts invested which is nice for those of us who don't have Admiral level funds available for investing outside of the HSA.
+1
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Old 12-09-2014, 02:17 PM   #13
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Do you have an option to avoid a service charge? It looks like the monthly service charge more than eats up what you can earn on the checking account. You need to give them about $35 year in service charges, and they give you $2.40 in interest. Are you making up the costs in your investments?
Yes. We have over $25K in the Vanguard Total Stock Market fund. So the $35 service charge is pretty much round off error.

The convenience of having it linked into my health insurance provider site it worth a few dollars. Eventually I may roll it over somewhere else, especially if I'm forced out of an HSA compliant insurance plan.
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Old 12-09-2014, 03:11 PM   #14
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Originally Posted by zinger1457 View Post
I use Wells Fargo HSA, they wave the monthly service fees as long as your account balance (savings and/or investment funds) is over $5k. They don't offer Vanguard funds but the funds they do offer are adequate for my needs.

I thought investment funds didn't count towards $5k?


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Old 12-09-2014, 03:36 PM   #15
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I thought investment funds didn't count towards $5k?
I keep $2K of my HSA account in the cash balance account, the remainder (including new deposits) are in investment funds, no monthly service fee.

From Wells Fargo:
Quote:
HSA monthly service fee $4.25
Fee will be waived if the combined deposit and investment balance in the HSA on the last business day of the month is
greater than or equal to $5,000.

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Old 12-09-2014, 11:56 PM   #16
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I use HSA Bank. Maintaining a $5,000 in the HSA account plus opting for e-statements etc. avoids all fees and earns .2% interest. All additional funds may be invested in Vanguard funds or ETFs through a linked account at TD Ameritrade with no associated fees. It's a bit convoluted but workable and all fees are avoided.
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Old 12-10-2014, 07:42 AM   #17
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I use HSA Bank. Maintaining a $5,000 in the HSA account plus opting for e-statements etc. avoids all fees and earns .2% interest. All additional funds may be invested in Vanguard funds or ETFs through a linked account at TD Ameritrade with no associated fees. It's a bit convoluted but workable and all fees are avoided.
Is there a trading fee at Ameritrade each time you buy a fund or ETF?
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Old 12-10-2014, 08:23 AM   #18
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Is there a trading fee at Ameritrade each time you buy a fund or ETF?
I only do this once per year so don't recall all the details but TD offers many commission free ETFs which includes Vanguard index ETFs. These are what I'm interested in so I pay no fees to TD (or to HSA Bank by keeping a minimum balance).
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Old 12-10-2014, 08:30 AM   #19
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This is the first year I used an HSA and "just recently set it up". Feeling like I had to do something quickly to get the tax credit for 2014, I went to my local regional bank. At the point in time, the funds in it become what I consider, investable, I might transfer. The bank waived the monthly service fee since I was transferring from a non service fee account into this and due to "the other account relationships".
I plan to use the money in it for next year's health care expenses (I think). So investing didn't seem a priority at the time. But if I decide to accumulate for later years,I will transfer for investment purposes.
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Old 12-10-2014, 10:56 AM   #20
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This is the first year I used an HSA and "just recently set it up". Feeling like I had to do something quickly to get the tax credit for 2014, I went to my local regional bank. At the point in time, the funds in it become what I consider, investable, I might transfer. The bank waived the monthly service fee since I was transferring from a non service fee account into this and due to "the other account relationships".
I plan to use the money in it for next year's health care expenses (I think). So investing didn't seem a priority at the time. But if I decide to accumulate for later years,I will transfer for investment purposes.
An HSA can be a great way to save tax free if you don't need the money right away, especially given that you can accumulate health care receipts and reimburse yourself at a later time (providing you don't claim them on your tax return). There are no other savings vehicles I'm aware of that allow tax free contributions, growth and withdrawals (when spent for medical expenses). They're a boon for early retirees.
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