The HSA Report Card

Bank of Cashton

Bank of Cashton

 

Bank of Cashton is a leading provider of HSAs, at the local, regional and national level. They've been offering these accounts since 1998 back when they were called, “Medical Savings Accounts”. Since then, the Bank of Cashton has had nationwide success, as they were voted as a top 5 HSA custodian in the country and currently serve HSA customers in 48 states.

 
 

Report Card

for Bank of Cashton as an investment vehicle

 
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Investment Threshold

The ideal investment health savings account (HSA) has no investment threshold, allowing the very first dollar you contribute to be invested. If you're using an HSA for investment purposes, seek an administrator that does not hold your dollars hostage in a checking account earning little to no interest. 

Bank of Cashton has no investment threshold requirement. Bank of Cashton is one of five administrators in our study that allows first dollar investing.

 
 
 

 
 

Investment Account

Bank of Cashton HSA participants can open a self-directed HSA investment brokerage account through Cetera Investments Services LLC. A Cetera self-directed brokerage account gives you the ability to invest in stocks, bonds and mutual funds.

A wide range of mutual funds are available, including mutual funds in the Cetera Investment Services NTF (non-transaction fee) mutual fund program. In the Cetera Investment Services NTF, transaction costs are waived on purchases that would normally carry a transaction charge.


 

Fees & Commissions

 
Condensed Schedule of Fees
Type of Fee Fee Details
Maintenance $2.08 per month Paid annually ($25)
Commissions $14.95 per equity trade Cetera Brokerage Account
Inactivity Fee $25 per year Calendar year
 
 

In our study of the top 10 investment HSAs, Bank of Cashton ranks as the 5th lowest cost administrator.

Bank of Cashton charges its HSA customers a $25 administrative fee and no investment fee. That said, Bank of Cashton HSA customers must use a Cetera brokerage account, which charges $14.95 per equity trade. Transaction costs can pile up if one trades frequently.

Tip: Make one equity trade per calendar year (Jan - Dec) to keep transaction costs down and avoid the inactivity fee. To keep portfolio costs to a minimum, consider buying a low cost index fund (ETF or mutual fund).

Complete Fee Schedule

 

 
 

Projected Fees

In this section we have a little fun projecting fees for each administrator. Keep in mind, we are assuming the HSA is being used solely for investment purposes. Given that every HSA is different, there is no perfect way to compare the top 10 administrators in our study. Nonetheless, we gave it a shot and believe there is value in presenting our findings.

In order to compare fees, we made a few simple assumptions:

  • Every dollar above the investment threshold was invested.

  • Current and future contributions were invested in a single fund.

    • The fund of choice: Vanguard Total Stock Market Index (VTI / VTSAX) or Vanguard 500 index (IVV / VIIIX / VFIAX). We believe these two funds are one and the same.

  • No transaction fee (NTF) or commission-free ETF programs were utilized to buy the Vanguard funds.

  • If the Vanguard funds were not available under the NTF and/or commission-free ETF programs, we turned to the open market and executed a single trade per calendar year in order to keep transaction costs down.

For Bank of Cashton we made the following assumptions:

  1. Every dollar is invested in VTI ETF (expense ratio 0.04%)

  2. Annual lump sum purchase of VTI ETF

  3. Commission: $14.95

  4. Dividends swept to money market account

The chart below summarizes the projected fees for Bank of Cashton on different investment balances.

 
 

The following chart illustrates where Bank of Cashton stands in terms of fees compared to the other top investment HSA administrators. 

 
 
 
 

If one takes the path to lowest fees, Bank of Cashton is the 5th lowest cost provider among the top 10 investment HSA administrators.

 

 
 

Features

Avatar
Feature
Auto Deposit
Investment Sweep
Automatic Rebalancing
Dividend Reinvestment
Receipt Storage Tool
Intuitive Technology

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience.  The Bank of Cashton does not give investors all the necessary tools to easily manage their account. Three features that would make the Bank of Cashton investment offering attractive are missing; 1) automated account transfers to the investment account 2) automatic rebalancing feature and 3) a receipt storage tool.

 
 
 
Auto Deposit ☑

First deposit must be in the form of a check. Thereafter recurring transfers from a personal checking account to the HSA account are available.

Investment Sweep ☒

Transfers from the HSA account to the investment account must be manually initiated.

Dividend Reinvestment ☑

Dividend reinvestment is available.

Auto Rebalance ☒

Investments cannot be automatically rebalanced in the Cetera brokerage account. Manual rebalancing is required.

Document Storage ☒

Bank of Cashton does not provide "shoeboxers" with a receipt storage tool.

Intuitive Technology ☑

Nothing to report.

 
 

Pros & Cons

 
Pros
  • You can keep fees low if you plan carefully

  • Access to a broad variety of investments via a Cetera self-directed brokerage account

  • First dollar investing
Cons
  • Potential for high transaction costs

  • HSA account and investment are not seamlessly integrated. Must sign on to two different platforms.
 
 
 

A Bank of Cashton HSA may suit you if:

  • You desire a broad variety of investment options, such as mutual funds, ETFs, stocks, and bonds

  • You are planning on only making one transaction per calendar year

  • You desire first dollar investing

 
 

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