The Best HSA's With Brokerage Accounts
Fidelity HSAs are brokerage accounts, giving you the option to invest in a wide variety of investment options depending on your investment objective, time horizon, and risk tolerance—including commission-free low-cost index funds, 265 commission-free ETFs, Treasuries, CDs, stocks, bonds, mutual funds and more.
Fidelity made some changes last year that make their brokerage offering extremely attractive to investors. Fidelity recently lowered its commissions to $4.95 per equity trade on their easy-to-use platform. Fidelity also now offers a selection of Fidelity Zero index funds, which have no expense ratio and no minimum investment requirement. Included in this list is the Fidelity ZERO Large Cap Index Fund (FNILX), Fidelity ZERO Extended Market Index Fund (FZIPX), Fidelity ZERO Total Market Index Fund (FZROX) and Fidelity ZERO International Index Fund (FZILX), which are all available to individual retail HSA investors.
Further participants can access a Charles Schwab brokerage account once the $10,000 mark is reached in the basic investment account. A plethora of fantastic investment options are opened up to participants via a Schwab brokerage account, including over 200 commission-free ETFs. The commission-free ETF lineup is full of high quality, low cost, index funds.
Lively and HSA Bank offer a TD Ameritrade self-directed brokerage account which gives investors access to stocks, bonds, 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.
Investors can still buy Vanguard and I-Shares ETFs, but have to pay a $6.95 commission for each trade. The new set of rules that TD Ameritrade has instituted will increase transaction costs for those who trickle money into Vanguard and I-Shares ETFs. The new lineup has a few low-cost SPDR ETFs from State Street Global Advisors. 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).
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.
The brokers mentioned above are presently the very best options for HSAs, but for non-HSA accounts we think very highly of M1 Finance. They just simply get it. First of all, it’s 100% free. No fees of any kind. Secondly, there’s built in convenience. M1 Finance allows you to intelligently and automatically invest in what you want. Thirdly, It’s flexible. Combining the best of both traditional investment brokerage accounts and robo advisors, M1 Finance is dangerously close to being the perfect all-around investment platform. We’d love to see an HSA administrator partner up with them and make HSA investing a piece of cake.