The HSA Report Card
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The HSA Report Card Blog

Top 10 Investment HSAs; A Feature Comparison

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In our search for the ultimate investment health savings accounts (HSAs), we looked for plans with investor-friendly features. Let's take a closer look at the specific features we like in an investment HSA.

The first feature we want to highlight are auto-deposits, which can be defined as automatic recurring fund transfers from a personal bank checking account to an HSA checking account. These auto-transfers are important because they get the flow of money going in the right direction.

Auto deposits automatically place funds in the HSA checking account, but we want those HSA dollars in the investment account. An investment sweep feature, automatically transfers a pre-selected amount of dollars from an HSA checking account to the investment account. These auto-transfers continue the movement of money into the investment account, which is where we want it.

Once those HSA dollars reach the investment account you'll be expected to set up a portfolio with your desired mix of stocks, bonds, cash, etc. (asset allocation). We all know that markets go up and down, and the investments in your portfolio will change in market value. That can throw your asset allocation out of whack. This is where an automatic rebalancing feature is convenient. How it works is that you set this feature to rebalance your investments back to a target asset allocation at a set interval. You might do it every three months, six months, annually or at some other interval.

Another feature that can help investors stay on track with their investment goals is a dividend reinvestment program. This is the process whereby a broker or a mutual fund automatically reinvests dividends back into an underlying security (i.e bond fund, equity fund). In order to optimize your investments, every penny that comes into your cash account should be put to work - immediately and automatically via a dividend reinvestment program.

The fifth feature we sought in an investment HSA is a receipt storage tool, which helps account holders organize and store healthcare receipts, medical claims, premiums, and other important documents in one place. An online receipt storage tool lets participants upload and store receipts, which is ideal for those employing the "shoebox strategy" - a unique wealth hack only available to those lucky enough to have an HSA. 

The sixth and final feature we looked for in an investment HSA was an intuitive website. Here, we are interested in the user interface and the digital customer experience. We looked at the ease of getting to basic account information and general accessibility of the site. We like sites with insightful visuals, such as charts with investment account balances and allocations. Additionally, calculators and other useful planning tools are helpful for HSA investors.

Below is a comparison table of the investment features for 10 of our favorite investment HSAs.

Administrator Auto Deposit Investment Sweep Auto Rebalance Dividend Reinvestment Receipt Storage Intuitive Website
 

Investment Feature Grades for Each Administrator

 

 
 
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Grade: C

The Bank of Cashton's is definitely a feature poor investment HSA. The Bank of Cashton lacks the following features: auto-rebalance, investment sweep and receipt storage tool. Hence, the poor grade.

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Grade: B

The only feature Further fails to provide investors with is the ability to automatically rebalance investments. Otherwise, Further provides account holders with features that make the investing process easy.

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Grade: A

In terms of investment features, HealthEquity is without a doubt the most feature rich HSA available. HealthEquity offers a solution for every kind of investor, from the experienced to the novice. They even offer a Robo-Advisor service, but be careful, it might cost you an arm and a leg (0.08% per month).

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Grade: B

Lively makes it incredibly easy for HSA investors to manage their account with its slick website, automated account transfers, and receipt storage tool for "shoeboxers." The only feature Lively (TD Ameritrade) lacks is automatic rebalancing. Besides this minor flaw, Lively makes investments a cinch. 

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Grade: B

Health Savings Administrators gives investors the necessary tools to easily manage their account. The website is easy to navigate and automated account transfers are available. A receipt storage tool would make the Health Savings Administrators offering even more attractive. 

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Grade: B

HSA Bank provides investors with all the features we look for, save automatic rebalancing. The investment platform is easy to navigate, automated account transfers can be instituted and a receipt storage tool is made available for "shoeboxers."

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Grade: A

Optum Bank recently updated its dreadfully outdated website. We like the new look. We also like that Optum provides every feature we look for in an investment HSA. 

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Grade: D

Saturna Capital's HSA offering is feature poor. Their offering is very basic. No auto-rebalance, no receipt storage tool, and a poor website all add up to a poor grade when it comes to investment features.

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Grade: C

There's a lot to like about The HSA Authority's investment offering, but it definitely falls short on the feature front. They require you to call a representative to transfer HSA dollars to the investment account. Time to upgrade those legacy systems. Additionally, they fail to provide investors with a receipt storage tool.

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Grade: B

UMB Bank's offering has all the features we look for in a high quality investment HSA, save the ability to auto-rebalance. 

 

A Feature We'd Like to See in the Near Future

Innovative Card Systems has developed the “investment card,” which is based on a comprehensive set of patent pending technologies that enables a financial institution (FI) to offer its customer a card linked directly to his brokerage account.  The customer selects the security (or securities) he wants linked to his investment card.  Then, via any major card network (e.g., Visa or MasterCard) with which the FI is affiliated, he makes purchases and the transaction amounts are deducted from his brokerage account via the sale of the underlying security (or securities) the cardholder specified. This feature would be ideal for someone who wants all of their HSA dollars invested, with the added benefit of accessing these funds with the swipe of a card. HSA investors wouldn't have to manually transfer money from the investment account to the HSA checking account to spend their dollars.

Noe Padilla