Health Savings Account (HSA) Providers to Consider

One way to save for future medical costs is to invest in a health savings account (HSA). It provides you with some great tax breaks while also helping you save for future healthcare expenses. These investments could prove vital amid daunting healthcare costs you may face as you get older, especially during retirement. You can open an HSA at most banks and financial institutions. But not all are created equal. We’ll explore some of the most popular HSAs, covering fees, interest rates and more.

A financial advisor can provide further insights into how an HSA could help you meet your long-term savings goals.

1. Bank of America

At Bank of America, you can open an HSA in just a few minutes. Whenever you invest in an HSA, you do it with pre-tax money. This means it comes out of your paycheck before Uncle Sam takes a chunk. Therefore, you can lower your taxable income when you contribute to an HSA. In addition, your money grows tax-free. Bank of America offers tiered interest rates depending on the size of the account. Anything under $2,500 earns 0.10% APY, accounts from $2,501 – $10,000 earn 0.30% APY, and any balance over $10,000 earns 0.70% Our data shows that Bank of America will charge a maximum monthly fee of $2.50 on your account.

In addition, you can manage your HSA with the Bank of America MyHealth app. It allows you to check balances, file claims and manage debit cards.

2. HealthEquity

With HealthEquity, you can open an HSA as long as you also pair it with a high-deductible health plan (HDHP). Its basic HSA offers three tiers of interest rates. Any accounts with less than $2,500 earn 0.05% APY, balances between $2,500 – $15,000 earn 0.07% and if you have over $15,000 you earn 0.10%. Monthly fees vary depending on balance as well, but the cap is $10 per month. However, your money will grow tax free. And the money you withdraw won’t be taxed either, as long as you use it to cover qualified medical expenses. Plus, you get to keep your account even if you leave your current job or switch to a different HDHP.

And unlike several providers, HealthEquity offers you access to a digital advisor. The platform helps you choose an investment based on your risk tolerance and financial needs. Your investment options also contain an “auto-pilot” feature that automatically rebalances its asset allocation over time.

3. HSA Bank

HSA Bank offers a variety of tools to help you manage your HSA. For example, you can use an HSA savings calculator to help you decide how much you should sock away in an HSA. The firm also offers a Health Plan Comparison Calculator. According to our research, you’d earn an interest rate of 0.15% on an investment of $15,000.

4. UMB Bank

UMB Bank allows you to open an HSA by investing in a variety of mutual funds. It charges a monthly fee of $3.75. However, all accounts are FDIC-insured. You can use your HSA dollars for eligible doctor’s visits, prescriptions and more. According to our research, an HSA with UMB Bank pays an interest rate of 0.06% on an investment of $15,000.

5. Optum Bank

Optum Bank recently launched a series of digital features to help you understand and manage your HSA. So if you want some guidance in working out your HSA or savings plan, Optum Bank might be a good fit. Our data shows an account with the bank currently generates an interest rate of 0.01%. It charges a monthly fee of $3.

6. Further

The HSA by Further offers the highest interest rate out of all the accounts in our study. It currently stands at 0.15% for a $15,000 investment, although it can’t compare to the best savings accounts available today. In fact, it rises to 0.2% on balances of $25,000 or more. And the maximum monthly fee is $4. The bank offers a range of digital tools to manage your account. You can access these through any mobile device.

How to Choose the Right HSA for You

Choosing the right HSA involves carefully weighing several key factors to ensure it aligns closely with your financial goals and healthcare needs. Here are some essential considerations to help you select the best option.

Fees: HSAs often come with monthly fees, transaction fees, and fees related to investment management. Lower fees mean more money remains in your account to grow tax-free. Review each provider’s fee schedule carefully and weigh these against the interest or returns you’re likely to earn. If you expect frequent transactions, choosing a low-fee provider, like Optum Bank, might be beneficial.

Investment Options: Many HSAs allow you to invest your savings in mutual funds, bonds, or other securities. If your goal is long-term growth, opt for a provider offering robust investment options and a user-friendly platform, like Further. Providers with automated investing or rebalancing features, such as HealthEquity, can simplify your investment management and help you maintain a balanced portfolio aligned with your risk tolerance.

Convenience and Digital Features: Ease of account management is crucial. Consider providers offering intuitive mobile apps, digital tools, and easy online access. Features such as account balance checking, easy claim submission, expense tracking, and automated investing can significantly simplify managing your HSA. Providers like Bank of America and Optum Bank excel in delivering accessible, user-friendly platforms.

Customer Support: Reliable customer service is invaluable, especially when managing complex transactions or addressing account-related questions. Providers with excellent customer support, accessible via multiple channels like online chat, email, and phone, can help you navigate issues swiftly. Check reviews and ratings to gauge the quality of customer care.

Anticipated Healthcare Needs: Your personal healthcare circumstances play a significant role. If you anticipate frequent medical expenses, an HSA with minimal fees and easy accessibility might suit your needs. Conversely, if your goal is saving primarily for future medical costs in retirement, prioritize providers offering superior long-term investment opportunities and higher interest rates.

Bottom Line

A stethoscope wrapping around a dollar sign.

Choosing the right HSA is a key step toward managing your future healthcare expenses. The best HSAs combine competitive interest rates, low fees and useful digital tools that can help streamline account management. Consider your individual financial goals, anticipated medical expenses and preferred features to select the HSA that fits your needs.

Tips to Save for Retirement

If you’re making serious retirement planning decisions, you could consider seeking the help of a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area. You can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Sometimes, it’s not easy to know how much you should be saving in a retirement plan. To simplify the process, we developed a retirement calculator.
If you haven’t started already, you should invest in a tax-advantaged retirement plan such as a 401(k) or an individual retirement account (IRA).