Any advice on where to open an hsa?

[Goldy1]

Or any pitfalls to avoid. I thought I read something here about watching out for fees. I kind of hate to park money in an account that will get me like 1% return also, but I realize if I en dup needing the hsa it will have tax advantages.

[jIM_Ohio]

The tax advantages beat the 1% return if you are in 15% bracket or higher.

My HSA "advice" (starting year 2 with about $200 left from year 1). I use a buckets system (3 buckets):

1) keep 2 years MAX expenses in cash (my plan has a $7000 max, so I want $14k in cash)- this is bucket 1.
2) keep third year expenses in moderate risk (a 20-80 type balanced fund or a bond fund).- this is bucket 2
3) keep any other monies in high growth allocation- this is bucket 3

Logic being:
1) I can use current year deposits for expenses before selling anything in bucket 2 or bucket 3
2) Money will be moved into high growth investments in $3000 increments ($3000 is the deductable for one person). Easy to track growth on round numbers.

I have the HSA for 3 reasons
1) More take home pay
2) Tax deduction
3) I have control of where money is spent

I actually spent 3 hours today tackling a health care issue (still not resolved). You have a high amount of risk if you incur a high expenses early in year (we are about to incur a $4000 expenses and have only $200 in the HSA right now). Avoid this risk at ALL costs I am finding out now the hard way.

[poundwise]

Do yourself a favor and don't open an HSA with a bank paying low rates. There are several HSA offerings with no or minimal fees and good rates, though you do have to look for them.


Examples --

Credit Unions:

Patelco Credit Union - 5.12% APY, $1/mo fee waived first year

Coastal Federal Credit Union - 4.00% APY, no setup or monthly fee

Alliant Credit Union - 4.00% APY, no setup or monthly fee

Banks:

PyraMax Bank - 3.00% APY, no setup or monthly fee

Cattle National Bank - 2.50% APY, $20 setup, no monthly fee if min balance of $500 is maintained



There are others as well. Check with credit unions in your area and keep searching online. You can have a decent rate (at least similar to standard online savings offerings) while avoiding fees.

[Goldy1]

Can I open accounts with these credit unions online or do I need to find a credit union near my home?
Can you have an hsa if you are employed an dnot self employed?

[Goldy1]

ok it appears I can open one of these accounts online.

[Goldy1]

thanks so much.

[Goldy1]

dh is laid off and going to school soon for some short courses in designing so I may buy a hsa insurance for him and it appears I can even pay his premiums with the hsa money since he is unemployed now.

[sweeps]

Do yourself a favor and don't open an HSA with a bank paying low rates. There are several HSA offerings with no or minimal fees and good rates, though you do have to look for them.


Examples --

Time for another sticky!

[poundwise]

Time for another sticky!