Saturna Capital Corporation was founded in 1989 by investment professionals as a mutual fund company. In 2005 Saturna began offering an HSA. The Saturna HSA offering is quite unique among the industry in that it is essentially a brokerage account. The Saturna HSA is targeted specifically at people who want to use their HSA as a retirement account. They don't provide their participants with a debit card or checks because they want to be upfront about who they are as an HSA provider.

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. 

Saturna Capital has no investment threshold. Saturna is one of six administrators in our study that allows first dollar investing.

Investment Account

Saturna offers HSA participants two choices when it comes to investing their HSA dollars.

1. You can open up a mutual fund account directly with Saturna Capital and buy their mutual funds. There's no annual fee. Their funds are actively managed and have high expense ratios.

2. A Saturna brokerage account administered by Pershing LLC. Through the brokerage account, participants can purchase stocks, ETFs, bonds, and a wide variety of non-Saturna affiliated funds. This includes access to no transaction fee (NTF) and no-load funds via the FundVest Focus platform. The platform features funds from providers including Franklin Templeton, Federated, Parnassus, PIMCO, Royce, and T. Rowe Price.

Fidelity, Schwab, and Vanguard funds are not included in the NTF list. However, one can buy Fidelity, Schwab, and Vanguard funds for $14.95 plus a $10 surcharge on the open market. To lower their expense ratios, these firms don't cover some of the regulatory requirements for delivery of documents, thus the $10 surcharge.

Recently, Pershing launched a new NTF exchange-traded fund (ETF) platform: FundVest ETF. The NTF ETF platform requires no purchase minimums or holding period and is available to all Pershing clients. FundVest ETF spans a diverse range of asset classes, featuring funds from providers including Direxion, Guggenheim Investments, PowerShares by Invesco, Oppenheimer Funds, PIMCO, and SPDR ETFs from State Street Global Advisors.

Of all the providers included in the NTF ETF platform, State Street Global Advisors offers the lowest cost funds. Notable funds include 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).

Condensed Schedule of Fees

Fee Minimization Strategies

Fidelity, Schwab, and Vanguard funds cost an extra $10 when buying them through a Saturna brokerage account. To avoid that $10 surcharge employ the following strategy:

• Buy Fidelity, Schwab or Vanguard ETFs to bypass the $10 charge surcharge.

• Make one trade per calendar year to keep costs down and avoid the $25 inactivity fee.

• Equity dividend reinvestment workaround - Opt to have dividends swept into the money market account.

If you want to have dividends reinvested at no cost and don't mind paying the $10 surcharge for Fidelity, Schwab, and Vanguard funds, employ the following strategy:

• Once per year, buy a low-cost Fidelity, Schwab or Vanguard index mutual fund. Fidelity, Schwab, and Vanguard mutual funds automatically reinvest dividends for free.

• Alternatively, elect dividend reinvestment and seek out an ETF ($14.95) that distributes dividends once or twice per year. That would cost you an additional $1 or $2 per year. Note: For stock or ETF reinvestment, contact a representative, or send a signed, written request indicating your dividend reinvestment preference. Be aware that not all stocks or ETFs are eligible for dividend reinvestment.

If you plan on making more than one transaction per year, consider employing the following strategy:

• Buy commission-free ETFs from the Fundvest ETF platform to build a low-cost portfolio.

• The SPDR ETFs from State Street Global Advisors are the lowest cost ETFs available.

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.

  • Total Stock Market Index (VTI / VTSAX / SPTM/ FZROX) or S&P 500 index (IVV / VIIIX / VFIAX). We believe these two index funds are one and the same.

• 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 Saturna Capital we made the following assumptions:

1. Every dollar is invested in VTI ETF (expense ratio 0.03%)

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 Saturna Capital on different investment balances.

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

When one takes the path to lowest fees, Saturna Capital ranks as the 2nd lowest cost provider in our study of the 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. The Saturna Capital investment HSA is definitely a feature-poor offering in that it doesn't give investors all the necessary tools to easily manage their account. Don't expect much in terms of features with this low-cost investment HSA provider.   

Personal Finance App Integrations

In this modern age of personal finance consumers want the ability to bring together information from multiple accounts and institutions in order to get a 360-degree of their finances and make better spending and saving decisions. The two best personal finance data aggragators are Personal Capital and Mint. Saturna Capital integrates with Personal Capital and Mint.

Pros & Cons

A Saturna Capital HSA may suit you if:

• You are comfortable directing your own investments and have a tolerance for investment risk

• 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 are planning on only investing your HSA dollars. Saturna is not recommended for people looking to spend and invest their HSA dollars.

Comments from around the web

Saturna. They have access to all the Vanguard funds and I only pay $25/year in fees. They have a transaction fee of $15/transaction (except Vanguard funds, which are $25/transaction). And since I do one deposit/transaction a year that $25 is all that I have to pay. The paperwork to set up my account was annoying, but maybe all of these require actual paper and snail mail? After the initial setup, I'm able to manage my account online.

Fat Albert - (Reddit)

Saturna doesn't have any minimum cash requirements and no regular fees, but do charge $15/trade (buying ETFs). If you're going to execute 1-2 trades per year, this could be the lowest cost option out there that has no minimum cash position.

powermega - (boglehads.org)

Saturna Capital if you plan to max it out in lump sums and not touch it for years if possible. They have their own funds but also can open and attach a Pershing brokerage account and buy Vanguard funds. Lowest fees I could find when I researched this earlier in the year if you plan to make a single annual contribution

VTS3X - (bogleheads.org)

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