The HSA Report Card

UMB Bank

UMB Bank

 

UMB Health Services, is a division of UMB Bank, n.a., based in Kansas City Missouri. UMB Healthcare Services is a top 10 custodian, with account holders throughout the nation. Today, UMB Healthcare Services provides solutions for more than 5.6 million healthcare spending account cards, including more than 1.25 million HSAs, with nearly $2.6 billion in HSA assets and deposits. Check out this infographic to learn more about the UMB Bank.

 
 

Report Card

for UMB Bank as an investment vehicle

 
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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. 

UMB Bank has established an investment threshold of $1,000. You must always have $1,000 in the HSA checking account. Any excess dollars over this amount can be transferred to the investment account.

 
 
 
 

Investment Account

UMB Healthcare Services offers account holders a well designed pre-selected investment lineup composed of 33 mutual funds. 70% (23) of the funds are from Vanguard. The other fund families represented in the lineup are illustrated in the chart below.

 
 
 
 

UMB Mutual Fund List

The table below displays the number of funds offered for each asset class in the UMB Bank investment lineup.  

 
 
Asset Class # of Funds Offered Index Fund Available?
Domestic Large Cap 4 Yes
Domestic Mid Cap 3 Yes
Domestic Small Cap 3 Yes
Foreign Developed Markets Equity 2 Yes
Emerging Markets Equity 2 Yes
Short & Intermediate Term Fixed Income 5 Yes
Target Date/Allocation 14 Yes
Specialty/Other 0 -
 
 

There's no secret that we here at the The HSA Report Card are big proponents of passive index investing. Thus, we looked favorably upon administrators that offered low cost index funds for each of the major asset classes. In the table above, you can see that UMB Bank offers low cost index funds for every major asset class. In fact, low-cost, broadly diversified index funds represent 70% of choices. UMB Bank has done a great job of constructing a well-rounded investment lineup.

How expensive are the funds in the UMB Bank investment lineup?

UMB Bank offers its participants a large number of low-priced funds. The expense ratios across asset classes are extremely low due to the heavy emphasis on low-cost index funds from the Vanguard family. Of the 7 HSA administrators in our study that offer pre-selected investment lineups, UMB Bank ranks in the middle of the pack when it comes to investment costs.

 
 

 
 
 

Interest Bearing Account

The UMB HSA Deposit Account is an interest bearing account. Interest bearing accounts make sense for participants that are uneasy about investing their HSA dollars in the equity markets. The interest rate and Annual Percentage Yield (APY) applicable to the entire balance in your Account on any given day will depend on which of the six specific balance ranges your daily Account balance falls within on that day. The six balance ranges are described below, and the initial interest rate and APY currently applicable to each are disclosed next to the particular balance level.

Tier Balances APY
Tier 1 $0 - $2,499 0.05%
Tier 2 $2,500 - $4,999 0.10%
Tier 3 $5,000 - $9,000 .15%
Tier 4 $10,000 - $$14,999 .20%
Tier 5 $15,000 - $24,999+ .40%
Tier 6 $25,000+ .50%
 
 

 
 

Fees

 
Condensed Schedule of Fees for Standard Plan (Non-Employer Group)
Type of Fee Fee Details
Administrative $2.50 per month Free (balance >$3,000)
Investment $3.00 per month Access to UMB HSA Saver
 
 

In our study of the top 10 investment HSAs, UMB Bank ranks in the middle of the pack when it comes to fees. UMB Bank charges its participants fixed fees, which is something we at The HSA Report Card view favorably.  

UMB Bank participants can evade the maintenance fee by leaving $3,000 in the HSA checking account. Before opting to leave $3,000 in the checking account, take into consideration the opportunity cost of not investing this money.

UMB Bank Fee Schedule

 
 

 

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 offering 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) or S&P 500 index (IVV VIIIX / VFIAX). We believe these two index funds are one in 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 UMB Bank we made the following assumptions:

  1. Every dollar was invested in VTSAX (expense ratio 0.05%)
  2. Annual Administrative Fee: $30
  3. Annual Investment Fee: $36

The chart below summarizes the projected fees on different investment balances for UMB Bank.

 
 
 
 

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

 
 
 
 

UMB Bank ranks as the 7th lowest cost provider among the top 10 investment HSA providers in our study.


 
 
 

Features

In our search for the very best investment HSAs, we looked for administrators that offered a hassle-free investment experience. UMB Bank gives investors all the necessary tools to easily manage their account. The HSA account and investment account can all be managed via the online member portal (WealthCare). 

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Feature Available?
Auto-Deposit
Investment Sweep
Automatic Rebalancing
Dividend Reinvestment
Receipt Storage Tool
Intuitive Website

Auto-Deposit

Within the WealthCare portal you can schedule recurring transfers from other financial institutions to the HSA Checking account

Investment Sweep

There is a one-way sweep from the HSA Checking account to the investment account. When your HSA balance exceeds a threshold you set, money will be swept out into your investment account and be allocated per the elections you have set up for investments.

Automatic Rebalancing

UMB Bank does not have an auto-rebalancing feature. Investments must be manually rebalanced.

Dividend Reinvestment

Dividends are automatically reinvested by each mutual fund in the investment account.

Receipt Storage Tool

Manage all of your receipts online using UMB Banks WealthCare portal. Simply take a photo on your phone or upload a scanned document from your computer to store for future tax free reimbursement, submit with a new claim or match with an existing claim.

Intuitive Website

The website is easy to use and navigate and only requires one password to access all accounts. You can view account and investment balances as well as graphs and reports to monitor contribution limits. HSA Saver is UMB Bank's proprietary investment platform, which has received good reviews by participants.

 
 

 
 
 
Pros
  • Reasonable fees
  • Well constructed investment lineup
  • Investment process can be automated
  • Integrated platform
Cons
  • $1,000 investment threshold
  • Opaque fee disclosures
 
 

 

A UMB Bank HSA may be right for you if:

  • You are satisfied with the investment options in the pre-selected lineup
  • You are planning on making multiple transactions per calendar year
  • You desire an online receipt storage tool
  • You are also planning on spending some of those HSA dollars. UMB Bank is on our short list of the best HSAs for spenders.
 

 

Other Investor HSA Guides


 

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