No-Fee, No Problem: The HSA That’s Totally Free

We know that a health savings account (HSA) can save you money for healthcare. But are those savings being eaten up by hidden fees? Here's why no-fee is best.
by Rachel Morgan Cautero July 25, 2019
Wait, HSAs have fees? Isn’t the whole point to save money on healthcare, not incur even more cost? That’s what we think, too. Though many of the big-name HSA administrators charge maintenance and administrative fees, ranging from $2.95/month to $4/month … or worse, inactivity fees of $25/year. That’s why Starship’s HSA is free. But more on that in a bit. 

So what do those hidden fees pay for?

HSA administrators can charge fees for a variety of purposes, such as monthly account maintenance, investment, and trading on top of that. (The latter two are assuming you will invest your HSA, as you should!). When it comes down to it, fees are working against you in just about every way your HSA is working for you.  To give you a better idea of what we mean, take a look at a few of the top HSA providers and the fees associated with their services:  
  • HSA Bank: $2.50/month account maintenance fee, $3/month investment fee (unless you maintain a bank account balance of at least $5,000)
  • Health Equity HSA: $3.95/month account maintenance fee (waived if balance is $2,500 or more), .033% monthly investment fee
  • Elements Financial HSA: $4/month account maintenance fee (waived if balance is $2,500 or more) 
Now, let’s break it down even further. Say you choose to sign up for an HSA with HealthEquity’s $2.95 monthly fee below $2,5000 and 0.33% interest rate on savings., If you synch your payments with your paychecks and “max out” your HSA contribution to get to $3,500 for the year, you’ll be setting aside roughly $291 per month. As a result, you’ll be under $2,500 for the first 8 months. In that same time, you’ll earn about a buck in interest. Yep, you’ll finish your first year with nearly $32 less in your account than you put in there. Plus, if you want to invest your money so you can make something closer to a 5-10% return annually, you’ll have to keep $2,500 in your HSA or else you’ll eat that $47 per year in minimum balance fees, and then still get charged investment/trade fees! What does all of this mean? Well, you could be paying anywhere from $30-$48 annually just to have an HSA with other plan administrators … not to mention how much you’ll pay in order to invest your HSA dollars. Woof.

A Bit About Our No-Fee HSA

Starship, in all its fee-free glory, is looking like a pretty great option right about now, am I right? Keep in mind—not paying anything doesn’t mean receiving an inadequate level of service. You’re still getting the best of the best, just…for free. With Starship, you’ll earn up to 0.20% variable interest, plus the option to invest (okay, that part costs $1/month), and of course, the pre-tax perks of your contributions. Plus, you’ll pocket an extra $48 each year to put into your HSA, money you would have wasted in fees with some other plan administrators. If you’re ready to learn more about your HSA-investing options, we’ve rounded up what you need to know here. (Not sure if you qualify for an HSA? Check out “Am I Eligible for an HSA?”)

Done Deal

Sure, any HSA will help you set aside pre-tax dollars specifically for healthcare costs and other eligible expenses. But having a no-fee HSA makes it easier to save even more—funds you can earmark for healthcare, or for retirement savings. So do the legwork and find the best no-fee HSA for you. Your future self will thank you.  

Take the first step
in taking care of you.