Criteria for Evaluating HSA Plans
as a Savings Vehicle
When evaluating health savings administrators (HSAs) as a savings vehicle, we primarily focused on maintenance fees and to a lesser extent on interest rates. This may seem counter intuitive, but in this low-interest rate environment, interest earned on HSA deposits is rather small and can even be negative if fees are excessive.
To safely earn interest on your precious HSA dollars turn to a local credit union or a brokerage house. Several HSAs offering competitive interest rates are run by local credit unions that have eligibility requirements, such as living in a particular state/region. Sometimes these requirements are waived with a small contribution to a local charity and sometimes not. We will present you with a few administrators that offer nationwide participation via eligibility workarounds. We will also present you with regional administrators that offer a combination of competitive interest rates and low fees. If you know of an administrator in your area that fits this profile, feel free to let us know.
Another option for HSA savers is to go with an administrator that is completely free and offers access to brokered CDs. Fidelity and Lively now offer individuals and families free access to brokerage accounts. This is great news for savers. Savers can now buy brokered CDs for free! Note: Brokered CDs have their own unique rules and characteristics. Perform your own due diligence to see if they make sense for you.
Note: If you are planning on spending or investing any HSA dollars, these HSA providers are not for you. These HSA providers should only be used to safely earn interest on HSA dollars. Once you graduate to a spender or investor, take advantage of your HSAs portability and roll it over to an HSA administrator that meets your specific needs.