HSA fees explained: monthly, investment, and transfer-out

The FDIC lists the main ones: some HSA administrators charge monthly maintenance fees, paper statement fees, outbound transfer fees, and account closure fees, which “can exceed the interest earned on the account.” It tells people to review the account disclosures for fee information and the interest rate (shown as an APY) before choosing. (FDIC)

This is the fee people notice first, and it’s often small, but it repeats every month. As a made-up example: $2.50 a month is $30 a year. If your balance is $1,000 and the cash rate is 0.05%, interest would be about $0.50 a year. That’s the point of the FDIC’s warning that fees can exceed interest.

Some providers waive the fee above a balance. Check how the waiver is counted, and see the directory for the details we’ve found.

Cash rates aren’t always measured the same way. A money-market fund’s yield, for example, isn’t the same thing as the APY on a bank deposit, so read the fine print before comparing.

If you invest, there are usually two layers. One is any fee the provider charges for the investment account. The other is the ongoing cost inside each fund, called the expense ratio. Investor.gov defines it as the annual percentage of a fund’s assets used for operating expenses, which reduces your return. (Investor.gov)

Our cash minimums guide explains how providers decide when you can start investing.

These are the fees you pay on the way out. The FDIC says HSAs “may impose ‘exit’ fees, including outbound transfer fees and account closure fees,” and suggests asking about delays in the availability of funds. (FDIC) You’ll see the fee figures we’ve found in the table below. For how to move money without creating a tax problem, see how to transfer your HSA without fees.

The IRS notes that HSA administration and maintenance fees withdrawn by the trustee aren’t reported as distributions from the HSA. (IRS Pub. 969) That’s about how the fee is reported. It doesn’t tell you whether the fee is a good deal. Your provider’s fee schedule does.

Some employers contract with a specific HSA provider, and the fee schedule that applies to you may differ from the provider’s public retail account. In our directory, for example, one workplace-only provider’s schedule changes depending on whether you’re still enrolled through your employer. Always ask HR or the provider for the schedule that applies to your account.