The single biggest avoidable cost in most people's HSAs is fees they did not realise they were paying. A $3.95 monthly fee at HealthEquity adds up to $47.40 per year, which sounds trivial. Compounded over 30 years at a 7 percent investment return, that fee stream costs approximately $4,800 in lost growth. The Optum Bank tiered investment fee of 0.03 percent on assets compounds to thousands more. Switching to Fidelity HSA or self-directed Lively can save five figures over an HSA lifetime.
This page compares the eight largest HSA custodians on fees, investment options, and operational considerations. The TL;DR: Fidelity HSA is the best overall pick for most savers. Lively self-directed is competitive. Your employer's default custodian (often Optum or HealthEquity) is rarely the long-term home, but it is the one your payroll deposits go to first.
| Provider | Monthly fee | Invest threshold | Expense ratios | Strength |
|---|---|---|---|---|
| Fidelity HSA | $0 | $0 | 0.00%-0.015% (FZROX, FSKAX) | Best overall: lowest fees, broadest investments |
| Lively (self-directed) | $0 | $0 | Schwab brokerage at standard ER | Clean UX, Schwab-backed investments, no fees |
| Lively (Guided Portfolios) | $2 ($24/yr) | $0 | ~0.07%-0.20% | For investors who want allocation guidance |
| HSA Bank | $3 (waived if balance > $5,000) | $1,000 historically, varies | Self-direct via TD Ameritrade or similar | Long-established, large employer relationships |
| HealthEquity | $3.95 | $500-$1,000 typical | 0.50% admin + fund ER | Common employer default, easy enrollment |
| Optum Bank | $3.75 (often waived by employer) | $2,000 historically, often reduced | 0.03% asset-based + fund ER | Largest employer HSA custodian, integration with UHC |
| Bank of America HSA | $2.50 | $1,000 | 0.30% admin + fund ER | BofA banking integration |
| Bend HSA | $3 (waived above $5,000) | $1,000 | Charles Schwab brokerage | Modern UX, Schwab-backed |
Fees, thresholds, and investment options change frequently. Verify current terms directly with each custodian before opening an account. Sources: published custodian fee schedules, 2025 Morningstar HSA Landscape report.
Fidelity HSA launched its retail HSA in 2018 and has consistently expanded features. As of 2026, Fidelity charges no monthly fee, no minimum to invest, no commission on stock or ETF trades, and offers commission-free access to all Fidelity-branded mutual funds. The ZERO-expense-ratio Fidelity funds (FZROX total market, FZILX international, FZIPX extended market, FNILX large cap) are available inside the HSA at literally 0.00% expense ratio.
The practical implication: a Fidelity HSA invested 100 percent in FZROX has zero ongoing fees of any kind. For a 30-year-old starting with $5,000 and contributing $4,400 per year for 35 years at a 7 percent real return, the Fidelity HSA grows to approximately $613,000. The same contributions at HealthEquity with $48/year fee and 0.50 percent admin fee plus 0.05 percent fund ER would grow to approximately $562,000. The fee drag costs roughly $51,000 in lifetime growth.
Lively is the leading independent HSA custodian. Self-directed Lively HSAs have no monthly fee, no investment threshold, and offer a Schwab-backed brokerage with access to the full universe of stocks, ETFs, and mutual funds. Lively's mobile and web UX is the cleanest among major HSA custodians.
For savers who want a different ecosystem from Fidelity (already have everything else at Vanguard, for example, and want to keep HSA separate), Lively self-directed offers comparable cost and access. The downside is that the Schwab integration is slightly more friction than Fidelity's fully integrated platform. Lively's Guided Portfolios option ($24/year) is for investors who want allocation guidance, though for most savers the self-directed option holding a single total-market index fund is simpler and cheaper.
If your employer's HSA is at Optum Bank or HealthEquity (the two most common defaults), and you want to consolidate at Fidelity, the mechanics are: open a Fidelity HSA in your name. Request a trustee-to-trustee transfer form from Fidelity. Submit the form to your employer's HSA custodian. Funds typically transfer in 5 to 15 business days. The transfer is tax-free, unlimited in frequency, and does not count as a rollover (which would have the one-per-year limit).
Important nuance: keep a small balance at the employer's HSA (typically $25 to $100) to maintain the account active for ongoing payroll contributions. Some employer HSAs charge a closure fee if the balance drops to zero. Run quarterly or semi-annual sweeps from the employer HSA to Fidelity. This minimises the cumulative fees you pay at the employer custodian while keeping payroll contributions flowing.
The alternative is the "rollover" (per IRC Section 223(f)(5)), which involves you receiving a distribution from the originating HSA and depositing it to the new HSA within 60 days. Rollovers are limited to one per 12-month period. Trustee-to-trustee transfers are unlimited and lower-risk because you never personally take possession of the funds. Always prefer trustee-to-trustee transfer.
The HSA is just a tax wrapper, the same investment principles apply as in any tax-advantaged retirement account. For most long-term savers (more than 10 years to expected use), the simplest and most effective allocation is a single broad-market index fund. Total US stock market funds (Fidelity FZROX or FSKAX, Vanguard VTSAX or VTI), global stock funds (Vanguard VT, Fidelity FZILX combined with FZROX), and target-date funds are all reasonable choices.
For investors within 5 years of expected significant HSA spending (approaching retirement and planning to use HSA for Medicare premiums, or anticipating a major medical event), shifting to a more balanced allocation reduces sequence risk. A 60/40 stock/bond mix or a Vanguard LifeStrategy fund (VSMGX moderate growth, VSCGX conservative growth) work well.
One HSA-specific consideration: the HSA cannot hold certain investments that an IRA can. No life insurance contracts, no collectibles, no S corporation stock with restrictions. For 99 percent of savers using mutual funds and ETFs, this is irrelevant. For self-directed investors who want exotic exposures, check your custodian's rules before assuming an investment is allowed.
Yes. Your employer's payroll HSA contributions must go to the custodian the employer designates, but you can transfer funds to a different HSA at any time. Most savers contribute through payroll to the employer-designated HSA (often Optum Bank or HealthEquity), then rollover quarterly or annually to a personal HSA at a lower-fee custodian like Fidelity. The transfer is tax-free and unlimited if done as a trustee-to-trustee transfer.
Fidelity HSA charges no monthly fee, no investment threshold, no transaction fee on Fidelity funds, and offers commission-free trading on stocks and ETFs. Lively comes second with no monthly fee for self-directed HSAs but a $24/year fee for guided investing. HSA Bank charges $3/month if balance is under $5,000 (waived above). HealthEquity charges $3.95/month and tiered investment fees. Optum Bank charges $3.75/month and tiered investment fees. For balances over $10,000, the fee difference compounds significantly.
Most custodians require a minimum cash balance before investing. Fidelity has no minimum (everything can be invested). Lively requires $0 minimum (everything investable). Optum Bank historically required $1,000 in cash before investing, since reduced to $0 for many plans. HSA Bank historically required $1,000 to $3,000 cash minimum. Check your custodian's current rules. A common strategy: keep 1 year of expected medical expenses in cash and invest the rest.
Usually yes, if your employer HSA charges monthly fees. Fees of $3 to $5 per month sound trivial but compound over decades to thousands of dollars. Trustee-to-trustee transfers are tax-free and unlimited. The downside: you have to manually initiate the transfer (form, signature, sometimes a small wire fee from the originating custodian). Quarterly or annual rollovers minimise the friction. Always leave a small cash balance at the employer HSA to accept ongoing payroll contributions.
For long-term investors (more than 10 years to expected use), a total US stock market index fund or global stock fund is the standard recommendation. Fidelity HSA offers FZROX (Fidelity ZERO Total Market) and FSKAX (Fidelity Total Market) at 0.00% and 0.015% expense ratios respectively. Vanguard's VTI and VT are also widely held in HSAs at custodians supporting them. For shorter timeframes or risk-averse investors, target-date funds or bond-heavy allocations are appropriate. The HSA is just a tax wrapper, investment principles inside it are the same as any retirement account.
Not financial or tax advice. Provider information based on published 2025-2026 fee schedules and 2025 Morningstar HSA Landscape report. Fees, thresholds, and investment options change frequently; always verify with the custodian directly before opening an account. No affiliate relationships with any HSA custodian.