What to look for in an HSA administrator

For all of the savings and investment info we discuss on this page, one of the most-common questions readers have is, "Where should I open my HSA?"

If you contribute through your employer, an administrator is provided for you. Should that be the case, you're probably going to want to use the administrator they offer you, because then you can have your HSA contributions deducted pre-tax from your pay. But if you're doing this on your own, there are some other things to consider.

Of course, there's no one "right answer" -- what works for you, might not be right for others. But we can help you cut through the noise, and offer a look into the details you should consider.

And, as always, you should check with a financial professional before making a decision about your HSA. But having some answers to the following questions can help you prepare for this pretty big step.

Will I get 1:1 attention?

Sometimes you just want a personal touch, even from a large bank. While many HSA administrators are nationwide banks with branches close to you, there are plenty of smaller (or even online-only) places that limit communication to email or call centers.

Some people see online communications as a plus, but others might want to speak with someone face-to-face when they make their investment decisions. Whatever level of interaction you want from your administrator, make sure they're capable of meeting those needs before signing up.

What fees are involved?

Not all HSAs are created equal, so it's a good idea to take note of fees from each of the options you're considering. Some administrators charge set fees each month. Others charge for opening the account. Some even charge per transaction or for insufficient deposits. Most have a combination of the above, at varying rates.

These fees usually aren't much different than what you'd find with any other savings account, but it's still worth requesting a full list of costs to see which best fits your budget, and your investment goals.

Is my HSA going to be a lot of work?

Today, most administrators make it easy to access your account and use your funds. From banking apps to HSA cards, most customers have a good view of their accounts, and can make changes on the fly.

But, some older institutions still work with paper forms for transferring funds and getting paid back for eligible expenses. The process still works, but it's usually much slower, which can cause massive headaches if you need the money sooner.

How can I invest my HSA?

HSAs are an investment opportunity for your future. But how far can you take your money? While some HSAs are simply savings accounts, other administrators give you the chance to invest these funds elsewhere.

As you've probably guessed by now, each bank operates differently, so be sure to ask about what potential investments you can make, what the fees will be, and how much of your account can be invested.

It's all about finding the best deal for you

Finding answers to the questions above will help get you ready for making the right call about your HSA. But it's important to remember a lot of your decisions will come down to how you plan on using the account.

In other words, if this is strictly a way to pad your retirement savings, you probably want the chance to maximize those funds, even if there's some investment risk involved. But if you're planning to use it to pay for future medical needs, maybe something with a solid interest rate is all you need.

We can't answer that question for you. But coming up with answers to these other questions should put you on the right path to making the most of your health savings.


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