The HSA Report Card

Lively

Lively

 

Lively is a San Francisco, California based startup focused on creating Health Savings Accounts (HSAs) that are simple to use and cost-effective for all. In fact, the basic HSA account is FREE for individuals and families. This is an unbelievable deal for a contemporary and intuitive product that was built around the consumer and their spending, saving, and investing needs.

 
 

Report Card for Lively

as an Investment Vehicle

 

Threshold

A

Investments

A

Fees

A

Features

B

Overall

A-

 
 

Investment Threshold

The best investment HSAs allow first dollar investing, which means that from the second money arrives into an HSA, from a contribution or transfer, participants can start investing. 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. 

Fortunately for investors, Lively has no investment threshold. Lively is one of five administrators in our study that allows first dollar investing.

 
 

 

Investment Account

 

Lively offers a TD Ameritrade self-directed brokerage account which gives investors access to stocks, bonds, CDs and mutual funds. TD Ameritrade used to have an awesome commission-free ETF program, which included many low-cost index funds from Vanguard and I-Shares. However, TD Ameritrade recently announced a change in the funds offered via their commission-free ETF program. They dropped all of the Vanguard and most of the I-Shares ETFs on Nov. 21st, 2017.

 
 
For Vanguard loyalists, note that TD has dropped them from their no-fee list, so investors will have to make do with other fund providers.
— aristotelian74 (REDDIT)
 
 

Investors can still buy Vanguard and I-Shares ETFs, but have to pay a $6.95 commission for each trade. Unfortunately, this will increase transaction costs for those who trickle money into Vanguard ETFs on a regular basis. A potential solution for this group of Vanguard investors is a systematic investment plan. With a systematic investment plan, there is a $49.99 transaction fee on the first purchase, with ensuing contributions being free of charge. The one drawback of systematic investment plans is that they can only be instituted with mutual funds.

The new TD Ameritrade commission-free ETF lineup is full of high expense ratio funds, but there are a few low-cost SPDR ETFs from State Street Global Advisors that are suitable for passive index investors. These funds include the SPDR Portfolio Total Stock Market ETF (SPTM), SPDR Portfolio World ex-US ETF (SPDW), SPDR Portfolio Emerging Markets ETF (SPEM), and SPDR Portfolio Aggregate Bond ETF (SPAB).



 

Interest-Bearing Account & CDs

 

Lively offers participants an FDIC-insured, interest bearing account. This is the default option when opening an HSA with Lively. Interest bearing accounts make sense for participants who are uneasy about investing their HSA dollars in the equity markets.

Highcharts Tutorial  

Another option for participants wanting to park money in safe interest accruing products are brokered CDs. Lively participants are able to access brokered CDs via the TD Ameritrade self-directed brokerage account. Brokered CDs are issued by banks but bought and sold through a brokerage. Interest rates offered by some brokered CDs via TD Ameritrade can be higher than those offered by Lively. We strongly encourage you to conduct your own due diligence on brokered CDs to see if they make sense for you. Check out our article on brokered CD’s if you want to learn more about them.


Fees & Commissions

 
 
Fee Amount Details
Investment Free No investing fees by Lively
Commissions $6.95/trade 300+ Commission-Free ETFs
 
 

100% free for investors. Simple. Transparent. Refreshing.  


 
 

Projected Fees

In this section, we have a little fun projecting fees for each administrator. Our goal for this exercise was to find the lowest possible fees for each administrator. Keep in mind, we assumed the HSA was being used solely for investment purposes, therefore only certain fees applied. 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 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 Lively we made the following assumptions:

  1. All assets were invested in SPTM ETF (expense ratio 0.03%)

  2. SPTM is a commission-free ETF. No transaction costs incurred.

  3. Annual Investment Fee: $0

Under these assumptions, the only fee investors will incur is the SPTM ETF expense ratio fee (0.03%).

 
 

The following chart illustrates where Lively stands in terms of fees compared to the other top 10 investment HSA administrators.  

 
 
 
 

As you can see, Lively's fees at every invested balance measured are extremely low compared to the other top 10 investment HSAs. 


 
 

Features

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience. Lively makes it incredibly easy for HSA investors to manage their account with its intuitive website, automated account transfers, and a receipt storage tool for "shoeboxers".

Feature
Auto Deposit
Investment Sweep
Auto Rebalance
Dividend Reinvestment
Receipt Storage Tool
Intuitive Technology
lively.png
 
 
(✔) Auto Deposit

With Lively you can set up scheduled recurring deposits from your bank checking account to the HSA checking account.

(✔) Investment Sweep

Automated transfers between the HSA account and TD Ameritrade (TDA) can be set up. Note that you must manually invest your HSA dollars once they reach the brokerage account. The implementation of a systematic investing plan would be the only way to have HSA dollars automatically flow into investments.

(✔) Dividend Reinvestment

TD Ameritrade offers a free dividend reinvestment plan (DRIP). They offer DRIP, free of charge, on most exchange-listed and NASDAQ stocks, ETFs, mutual funds, and ADRs. The stock and ETF DRIP allows you to reinvest your cash dividends or mutual fund distributions by purchasing additional shares or fractional shares.

(✖) Auto Rebalance

TD Ameritrade does not offer an auto-rebalance feature. Manual rebalancing is required.

(✔) Document Storage

Lively’s dashboard allows you to keep track of receipts as well as categorize each transaction by type. Tagging each transaction will help to filter down your list as it grows. Additionally, you can input a description or note for each transaction, this way you can remember exactly what each purchase was for.

(✔) Intuitive Technology

Lively's intuitive dashboard makes HSA accounts simple to manage. The dashboard displays your HSA balance and investment balance. In the investment balance window, there is a "My Positions" tab and an "Activity" tab, that displays positions and transaction info from TD Ameritrade.

 
 

Pros & Cons

Pros
  • First dollar investing

  • 100% fee-free

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

  • Online receipt storage tool
Cons
  • Short operating history

  • Few low-cost ETFs in the new TD Ameritrade commission-free ETF program

  • No pre-selected investment lineup
Personal Capital Lively integrates with this budgeting, investing, and finance app.
Mint Lively's spending acount is not integrated with this budget centered platform. Lively's investment account via TD Ameritrade is integrated with Mint.
 
 

A Lively HSA may be right for you if:

  • You are comfortable directing your own investments and desire a broad variety of investment options, such as mutual funds, ETFs, stocks, and bonds

  • You are satisfied with the investment options in the TD Ameritrade commission-free ETF list

  • You desire first dollar investing

  • You desire an online receipt storage tool

  • You understand that Lively is a startup

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


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