HSA Investing Brokerage

Investing
#1

Back again, I finally have enough in my HSA account through Optum Bank to begin investing… and I am confused. So when I follow the link to begin investing I am only offered service through Betterment or the purchase of Mutual funds. I choose Betterment and when reading all the pages prior to opening I see “You will be charged an annual fee of 0.50% of your HSA balance that Betterment manages, which includes fees for Betterment and Optum Bank.” This is not good, and unexpected? I see on this blog and through the course Fidelity is a popular brokerage. Do they also charge a similar fee?

I am also confused by the presentation of all these fund options in “my available funds.” When I click on them it simply takes me to the MorningStar reports. I assume if I create my account through Betterment then I can choose one to invest. I just haven’t created the account with Betterment because of that fee mentioned above. Thank you always to this community!

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#2

It looks like Betterment is just one option, here is how you invest without using Betterment.

Optum Bank offers a diverse set of mutual funds that average a four-star Morningstar rating and represent some of the lowest expense ratios in the industry. Once your HSA reaches the certain investment threshold, typically $2,000, you may choose to invest a portion of your HSA dollars in mutual funds.

Optum Bank mutual funds include:

  • Vanguard funds
  • Target date funds
  • Lifestyle funds

When you set up your Optum Bank investment account, you can choose how you want the funds to be allocated among the available mutual funds. Our asset allocation calculator can help you decide which funds are right for you. There is no minimum initial investment amount required by mutual funds.

  • You have the ability to transfer between funds and re-allocate balances
  • You may set up automatic portfolio rebalancing
  • If a qualified medical expense comes up, it’s easy to move money back to your HSA cash account to pay for it

After your account is established, you can change your investment elections, transfer funds and rebalance your account.

To start investing your HSA in mutual funds, simply follow these steps:

  1. Sign in to your HSA and set up your investment account by choosing the funds you want to invest in.
  2. Indicate the amount you want to transfer into your investment account. The minimum amount that can be transferred at one time is $100. So you will need to have a balance of $2,100 before you are eligible to invest (assuming $2,000 investment threshold).
  3. To make things easier, you can choose to set up recurring transfers/sweeps. This means that you can choose an amount and any time your account exceeds it, funds will be automatically transferred to your investment account. For example, if you choose $2,000 and your balance hits $2,500, $500 will be swept over to your investment account.
#3

Hi Don,
Thank you for finding that information and kindly posting it for me. I copied/pasted and the link I found from that page is presented differently than through my actual account and I have successfully invested!

Thank you!

#4

Woohoo !!! Well done :+1: :+1: :+1:

#5

Hello, checking in Jan 2023 :slight_smile:

Interesting enough, when I look at my HSA options in 2023 they match the exact screen shot you have above of fund options.

Did you go the Mutual Fund investment option?? How has it been going for you?

Thank you!
Beth