I got one of those "important notice" emails that I'm sure a lot of people don't bother reading, including me sometimes. Buried in the middle was this:
Deposit Account Balance Requirement to Waive Monthly Fee will be $4,850
This is the minimum amount of funds that must be maintained in your HSA each day of the
month in order for you to avoid paying your monthly deposit account maintenance fee.
effective Sept 1.
This is a really slimey move. I'm sure they are counting on catching a lot of people by surprise when they go to check their HSA balances at the end of the year and find 4 months of low balance fees.
Deposit Account Balance Requirement to Waive Monthly Fee will be $4,850
This is the minimum amount of funds that must be maintained in your HSA each day of the
month in order for you to avoid paying your monthly deposit account maintenance fee.
That's a very high balance requirement and it doesn't even sound like it's average balance. If I'm reading it correct you pay the fee if you drop below $4850 any time during the month.
I switched all of my banking from Bank of America to Fidelity several years ago. I pay no fees, and all ATM transaction fees any where in the world are refunded. The checking account is interest bearing and even used to pay a decent rate although that is a thing of the past. I worried about not having a local bank to walk into and do business but that has not been a problem at all. They send you envelopes for mailing in deposits which isn't really any harder than actually going to the bank to make the deposit, but now it is even easier. You can take a picture of your check with your mobile phone and be done with it.
(disclaimer - I work for a company called Fidelity but it's not THAT Fidelity).
Last edited by notsheigetz on Fri Jul 19, 2013 5:35 pm, edited 1 time in total.
Isn't the current no-fee balance $5,000? Or am I mixing up accounts.
I do recall when they made the last fee change it was done under similar, slimy, circumstances.
It is the settled policy of America, that as peace is better than war, war is better than tribute. The United States, while they wish for war with no nation, will buy peace with none"James Madison
It's slimy, but it doesn't really affect me. I already have almost everything in the brokerage window, because the bank pays such crappy interest rates.
Ok. It is currently $3,000 for the basic account (saves the $2.50 monthly fee). If you have the TD Ameritrade brokerage window you need a $5,000 account balance (in the bank account) to waive the $3.00 fee. Although I cannot find the information on their web site, I believe the $3.00 fee cannot be paid by a third-party (like your employer), unlike the $2.50 fee which can. Weird.
It is the settled policy of America, that as peace is better than war, war is better than tribute. The United States, while they wish for war with no nation, will buy peace with none"James Madison
FYI the minimum waiver balance (to avoid the monthly $2.50 fee) has been increased to $4,950. This was of course unannounced, so if anyone had maneuvered to get just above the previous $4,850 balance, you didn't escape this time. More to the point though, if you plan to keep just the minimum $5K in the HSA main account and put the rest into the TD ameritrade brokerage, be prepared to move fast and perhaps sell fund shares in case they keep increasing the minimum balances. And check the account regularly!!!
As underhanded as this is...HSA bank is still a pretty good deal. My employer makes payroll deductions into a Chase Bank HSA, which charges outrageous fees if you try to access the money - in fact there's a little box you can check in your benefits enrollment that says "automatically pay unreimbursed medical expenses from your HSA." Which sounds great until you discover that each transaction would incur a $5 charge. Luckily, Chase doesn't charge to roll over funds :-)
I don't have a problem with HSA bank but I do need some help here... Who should have an HSA account? The little bit of reading I have done online about them seems to always say something like "If you have maxed out contributions to all of your retirement accounts, you should consider putting some money into an HSA."
I also have an account with HSA bank and have never been a fan of the fees. However, a brief search showed that banking options for HSA accounts are pretty limited. Does anyone have any recommendations?
hoost wrote:
I looked a few months ago and came to the same conclusion...HSA Bank was the best option.
So annoying. I too decided it's better to just pay the fees and keep everything but enough to pay the fees in the brokerage window.
I no longer have a high deductible plan, so I'm pretty sure the HSA was a wash for me. I keep my bond portion in there, so after fees I'm earning like 2% or something. Don't forget some states (CA) don't give any tax deferred status to HSA.
barrett wrote:
I don't have a problem with HSA bank but I do need some help here... Who should have an HSA account? The little bit of reading I have done online about them seems to always say something like "If you have maxed out contributions to all of your retirement accounts, you should consider putting some money into an HSA."
What's the real story? Thanks.
Max your HSA every year. It's a no-brainer. The money is tax-free INCLUDING social security and medicare on the way in, and if you save all your medical bills and only take out money that can be matched to medical expenses, it's also tax free on the way out. Plus you can access it any time. It's the best deal of any of the retirement account types. At worst, if you withdraw money for any other reason it's treated like a traditional IRA.
I'm not crazy about HSA Bank's ever-increasing minimum balance policy. They told me they've indexed it to inflation, so expect it to go up every year and just plan on keeping one step ahead to be sure of avoiding the fees. But the ability to buy commission-free ETFs in the brokerage account is the saving grace.
This is the former Ely Lilly credit union, I read a few current blog posts about it that say it is better than HSA bank. The downside to the EFFCU is a wire transfer fee, but it looks like it would be less than the HSA Bank penalty fees if you only wire money to the brokerage once a year.
So I double-checked my HSA account, and I was mistaken about the company (I changed with my last job). My current account is with BMO Harris. The upside is that there appears to be no minimum account balance or associated maintenance fees. The downside is that it's a straight checking account with no brokerage window. I just consider the balance part of my PP cash, so that works fine.
