The HSA Report Card

Further

Further (Formerly SelectAccount)

 

Further is a non-bank health care accounts administrator, based in Minneapolis, Minnesota. In 2004 Further introduced its first HSA product, making it one of the first companies to administer HSAs nationwide. It has earned a reputation as one of the most experienced and trusted account administrators in the country. Of note is their exceptional service model. The entire customer service team is certified as HSA experts and is continuously trained in spending account rules and regulations. They claim a 96% customer satisfaction rating.

 
 

Report Card for Further

as an Investment Vehicle

 

Threshold

B

Investments

A

Fees

A

Features

B

Overall

A-/B+

 
 

 

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. 

Further has established an investment threshold of $1,000. You must always have $1,000 in the HSA deposit account. Any excess dollars over this amount can be transferred to the investment account.

 
 

Keeping funds in a low-interest cash account means accountholders miss out on those funds’ potential investment returns; this is known as opportunity cost. In a way this is a hidden fee because the opportunity to earn money on those dollars is lost. In the case of Further the opportunity cost of $1,000 not invested is $60, assuming a conservative annual rate of return of 6% and $1 earned in Further’s savings account.

 
 

 

Investment Account

The Further HSA includes an optional built-in investment account that you can activate when your base balance exceeds $1,000, giving you access to a variety of mutual funds through the Charles Schwab platform. As funds grow and your balance exceeds $10,000, you have the opportunity to take more control over your funds with a self-directed brokerage account. 

Pre-Selected Mutual Fund Lineup (Basic Investment Account)

The Basic Investment Account gives you access to a suite of 32 no-load and load-waived pre-selected mutual funds. 12 different fund families are represented in the Further investment lineup. 56% (18) of the funds are from the Vanguard family.

 
 
 
 

The table below displays the number of funds offered for each asset class in the Further investment lineup.

 
 
Asset Class # of Funds Offered Index Fund Available?
Domestic Large Cap 4 Yes
Domestic Mid Cap 1 Yes
Domestic Small Cap 4 Yes
Foreign Developed Markets Equity 2 No
Emerging Markets Equity 1 No
Short & Intermediate Term Fixed Income 4 No
Target Date/Allocation 14 Yes
Specialty/Other 2 -

At The HSA Report Card we are big proponents of passive index investing and thus rate highly administrators that offer low-cost index funds for each of the major asset classes. In the table above, you can see that the Further investment lineup lacks low-cost index funds for 3 major asset classes (foreign developed, emerging markets, and fixed income). 

How expensive are the funds in the Further investment lineup?

Further offers its participants a lot of very expensive funds. As you can see in the chart below, only HSA Bank offers its account holders more expensive funds. 

 
 

Further offers a combination of actively managed and passively managed funds. There are more actively managed funds than passively managed funds, hence the high expense ratios. That said, the lineup has several fantastically priced domestic equity index funds and Target Date funds from Vanguard.

 
 

Charles Schwab Self-Directed Brokerage Account

 
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When your Further HSA reaches a minimum base balance of $11,000, you are eligible to move $10,000 to the Charles Schwab Self-directed Brokerage Account. $1,000 must remain in your Further base savings account.

The Charles Schwab self-directed brokerage account is an online investment account through Charles Schwab & Company. Eligible investments include stocks, bonds, mutual funds, ETFs, and a variety of other investments on the Schwab trading platform.

On October 1st Schwab announced that it is ending commissions for online trading in U.S. stocks, exchange-traded funds and options, starting October 7th. Schwab investors are now able to trade a wide collection of exchange-traded funds without charge — making it easy and free to build a low cost, diversified indexed portfolio. Schwab also offers users an intuitive and easy to use interface. Schwab has consistently garnered high marks by reputable reviewers online when it comes to it’s platform.

 
 


 

Fees

Condensed Schedule of Fees (Further Value HSA Plan)
Type Amount Details
Administrative $1/mo Further Value HSA Plan
Basic Investment Account $1.50/mo Pre-Selected Investment Lineup
Schwab Brokerage Account $1.50/mo $18 per year
Commissions $4.95/trade 200+ Commission-free ETFs
 
 

In our study of the top 10 investment HSAs, Further ranks as one of the lowest cost administrators. Further charges its participant’s fixed investment fees, which is something we at The HSA Report Card view favorably.  

If you use the Charles Schwab Brokerage account, avoid transaction costs by investing in the commission-free ETFs available.

Further Complete Fee Schedule

 
 

 

Projected Fees

In this section, we have a little fun projecting fees for each administrator. Our goal was to find the path to the lowest possible fees for each administrator. Keep in mind, we are assuming the HSA is being used solely for investment purposes, therefore only certain fees will apply. 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.

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

  • If these index 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 Further we made the following assumptions:

  1. Further Value HSA Plan

  2. All assets were invested in VFIAX (expense ratio 0.04%)

  3. Annual investment fee: $18

  4. Annual administrative fee: $12

The chart below illustrates the projected fees on different investment balances for Further.

 
 

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

 
 
 
 

Further's fees are extremely low compared to its competition. Ranking as the 4th lowest cost provider out of the top 10 investment HSAs in our study.

 
 

 
 

Features

 

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience. Further gives investors all the necessary tools to easily manage their account. The website is easy to navigate, automated account transfers are available and a receipt storage tool is made available for "shoeboxers". 

Feature
Auto Deposit
Investment Sweep
Auto Rebalance
Dividend Reinvestment
Receipt Storage Tool
Intuitive Technology
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Auto Deposit

Further lets you set up scheduled recurring deposits from your bank checking account to the HSA checking account. Set up a recurring daily, weekly or monthly contribution.

Investment Sweep

There is a one-way sweep from the HSA Checking account to the investment account(s). When your HSA balance exceeds a threshold you set, money will be swept into either your Schwab brokerage account or Basic Investment Account. Money flowing into the Basic Investment Account will be allocated per the elections you have set up for investments.

Dividend Reinvestment

Dividends are automatically reinvested by each mutual fund in the Basic Investment Account. Charles Schwab also offers a free dividend reinvestment service.

Auto Rebalance

Further does not offer an auto-rebalance feature. Investments must be manually rebalanced in the Basic Investment Account. Investments must also be manually rebalanced when using the Schwab brokerage account.

Receipt Storage

Manage all of your receipts online using Further's My Records and Receipts electronic document storage system. Simply take a photo on your phone or upload a scanned document from your computer to store for future tax-free reimbursement, submit with a new claim or match with an existing claim.

Intuitive Technology

Further's website is very easy to navigate. The home screen provides a summary of your entire account. It shows you a breakdown of your current account balance, contributions to date, and a tabs menu to easily navigate the website.

Personal Finance App Integrations

Personal Capital Further integrates with this budgeting, investing, and finance app.
Mint Further integrates with this budget centered platform.

 

Pros & Cons

Pros
  • Access to a pre-selected investment lineup and/or brokerage account

  • Low fees

  • Investments can be put on auto-pilot

  • 200+ commission-free ETFs
Cons
  • The Basic Investment Account is mainly composed of high expense ratio funds

  • $1,000 must always be in the HSA checking account

  • Access to Schwab brokerage account is granted once base balance reaches $11,000
 
 

 

A Further HSA may be right for you if:

  • You are satisfied with the investment options in the pre-selected lineup and want access to a brokerage account once the $10,000 mark is reached

  • You are planning on making multiple transactions per calendar year

  • You desire an online receipt storage tool

  • You are also planning on spending some of those HSA dollars. Further is on our short list of the best HSAs for spenders.


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