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The Pros and Cons of a Health Savings Account (HSA)

Aug 19th, 2020 • Damian Dunn

Over a year ago I moved from my employers high deductible medical plan to my wife’s medical plan. While I was in the high deductible plan, I was maxing out my HSA. I currently have $6,500 in the HSA ($6,000 invested in a mutual fund). My company has since moved to a medical plan with an FSA. So, the HSA bank is going to start charging a $5 monthly maintenance fee. While this isn’t the end of the world, (my invested funds should return more than $60 per year) do I have any other options to rollover the HSA into another HSA account that will incur less fees?


Hey Dave,

As you probably know, we love Health Saving Accounts (HSAs) around here. For those of you that aren’t up to speed on the advantages and how they work, here’s a short summary. HSAs are paired with a high deductible health insurance plan (HDHP) to add a saving component to your health care coverage. The money contributed to your HSA can be used for all sorts of healthcare related expenses in the year the money is contributed or in the future.

HSA contributions are also triple tax advantaged. 

  • Contributions are tax deductible in the year they are made
  • The money then grows tax-free inside the HSA account
  • Withdrawals are tax-free as well as long as the money is used for a qualified healthcare expense. 

Some people, like Dave, choose to invest some/all of their HSA funds once they reach a certain dollar amount in an effort to grow that money as much as possible prior to needing it down the road. As Dave notes, however, a number of companies charge a monthly maintenance fee for their account holders that can eat away and any returns you’re able to earn in the account. 

That doesn’t mean all companies charge a fee. In fact, some of the free options are pretty darn appealing. 

For example, one very large, well known company offers a free HSA account option. Fidelity allows you to open a free HSA account with them and invest in a variety of selected funds. I’m sure some individuals/families would be most comfortable with the name recognition of Fidelity. However, while Fidelity may be a familiar name, it isn’t the only game in town. Lively offers a popular no-fee HSA that provides access to investments through TD Ameritrade as well as an FDIC insured saving option. 

Reducing fees is a responsible thing to do in any investing endeavor, HSA accounts included. I encourage you to search for a company you’re comfortable with in regards to service and fees. And remember, you can switch companies later if the offering changes or a better option is created somewhere else. 

For more guidance like this, hire your own financial expert for just $19.99 a month with Hey Money. You can build a personal relationship with one of our experts, maybe even Damian! They are here to guide you every step of the way toward the financial life you want. Learn more here.

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