Brokerage Run HSA Accounts?

Apparently. Vanguard Investments doesn't have anything directly they mention the following:

Although Vanguard doesn't offer its own health savings account, several banks, credit unions, insurance companies, and IRS-approved entities offer a brokerage option with an opportunity to invest in Vanguard funds. These are generally the best places to look for an HSA custodian.

If you want to open an HSA with an all-Vanguard fund lineup, consider HealthSavings Administrators or HealthEquity. Each organization offers a selection of about 20 Vanguard funds covering a variety of asset classes--and their accounts have no minimum balance requirements.

In article you write:

If your HSA is at HSA Bank

they can open a linked account at TD Ameritrade and move money back and forth within the HSA. That's what I've done. You need to leave $3K in the bank account to avoid monthly fees.

There are some HSA trustees that offer mutual funds, but the extra fees they charge make them unattractive compared to buying the corresponding ETF in an Ameritrade account. There's a one-off brokerage fee to buy or sell the ETF but nothing while you hold it and no charge for dividend reinvestments.

R's, John

Fees and mins with a given trustee may vary depending on how you get the account. HSA Bank's "Standard Rate and Fee Schedule" may be found here:

It seems to have a $5K min for retail accounts (i.e. not through employers). Even assuming a $3K min, if you expect to earn just 3% with an investment, that's an opportunity cost of $90/year. That's beginning to look unattractive compared to trustees charging $30 or $36/year plus requiring you to keep "just" $1K in the bank.

It really depends on what you want - full flexibility of an attached brokerage account, or a fixed 401k-like list of fund choices. If the latter is okay, taruss pointed you at a couple of good trustees for Vanguard-only options. I would also suggest looking at The HSA Authority. It offers several Vanguard funds (Admiral shares), plus a fair variety of other low cost funds.

TANSTAFFL. Best site I've found for listing and info on various HSA trustees, including their fees and investment options is HSAsearch

Good luck.

But I would also look closely at their fees. My HSA is up in the five figures, and the extra fees that the Vanguard-only trustees tack on would swamp the implied cost of leaving $3K at HSA bank.

R's, John

That's true. Like many things, what works best depends.

The fees added are - HealthEquity: 0.24% AUM plus $36 - HealthSavings Administrators: 0.25% AUM plus $45 (my error, I had thought it was $36)

So these fees do go up as the account grows. But until the account becomes quite sizeable, these trustees still seem to be a bit more economical.

That extra 1/4% on $20K is $50. So for many people, the total annual cost comes out to under $100. That's 3.3% of a $3K balance requirement, or 2% of the $5K balance requirement imposed on new retail accounts at HSA Bank.

The HSA Authority seems to do better, albeit with a different set of funds. It has fewer Vanguard funds while offering additional actively managed funds from various families. I suppose one might exclude them in a discussion about the very cheapest HSA investment options.

Its bank account is free, and it adds just a flat $36 fee for investing in its set of funds. Its fees can be found in its enrollment packet here:

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