Top 10 Investment HSAs; A Feature Comparison

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 table that compares the investment features of 10 HSA administrators we follow closely on this site.

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

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.