Fidelity Hsa: Are There Hidden Costs To Investing?

There are no fees for opening a Fidelity Health Savings Account (HSA)® and no minimum balance is required. However, there are some costs associated with investing through a Fidelity HSA. For example, with a Fidelity Go® HSA, your account balance must be at least $10 for Fidelity to invest your money according to the chosen investment strategy. Additionally, the Fidelity Go® HSA charges a 0.35% advisory fee per year for balances of $25,000 and above, although this fee is waived for balances below that threshold.

There are no account fees or minimums for Fidelity HSAs

There are no account fees or minimums for Fidelity Health Savings Accounts (HSAs). This means that there are no costs to open an account, and you can start investing with any amount. However, there may be other costs associated with specific investments, such as commissions, interest charges, and other transaction fees.

Fidelity offers two types of HSAs: a self-invested HSA and a Fidelity Go® HSA. With the self-invested HSA, you can choose and manage your own investments, while with the Fidelity Go® HSA, Fidelity manages and invests your money for you. There are no fees for opening either type of account, and you can invest any amount. However, with the Fidelity Go® HSA, your account balance must be at least $10 for Fidelity to invest your money according to the chosen investment strategy.

The self-invested HSA has no account fees, but there are mutual fund expenses, commissions, interest charges, and other expenses related to transactions or holding specific investments. On the other hand, the Fidelity Go® HSA does not charge advisory fees on balances under $25,000, but there is an annual advisory fee of 0.35% for balances of $25,000 and above, which includes unlimited 1-on-1 coaching calls.

Additionally, if you have a Fidelity HSA through your employer, your account may be charged an administrative fee of up to $12 per quarter ($48 annually), unless your employer pays this fee. This administrative fee may be waived for households established before a certain date and meeting certain asset minimums at Fidelity.

In summary, while there are no account fees or minimums for opening a Fidelity HSA, there may be other costs associated with specific investments or account features. It is important to carefully review the fee structure before making any investment decisions.

There is no minimum required to open a Fidelity HSA account

There is no minimum required to open a Fidelity Health Savings Account (HSA). You can open a Fidelity HSA with no money and start investing with as little as $10. There are also no account fees or minimums, and $0 commission for US stock and ETF trades.

Fidelity offers two types of HSAs: a self-directed HSA, which you invest yourself, and a Fidelity Go HSA, which Fidelity manages and invests for you. There are no fees for opening either type of account, and you can invest any amount. However, with a Fidelity Go HSA, your account balance must be at least $10 for Fidelity to invest your money according to the investment strategy you've chosen.

With a self-directed HSA, there are no account fees or minimums, but mutual fund expenses, commissions, interest charges, and other expenses related to transactions or holding specific investments will still apply. With a Fidelity Go HSA, there is no advisory fee for balances under $25,000, but there is a 0.35% advisory fee per year for balances of $25,000 and above. This includes unlimited 1-on-1 coaching calls.

In addition to having no minimum required to open an account, a Fidelity HSA offers several other benefits. For example, HSA contributions are tax-deductible, and withdrawals are free from federal income taxes when spending on qualified medical expenses. Any investment growth is also tax-free. Furthermore, a Fidelity HSA is never "use-it-or-lose-it," so your money rolls over to the next year, and you keep control of the account even if you switch employers or move to another state.

You can transfer an existing HSA from another provider to Fidelity at any time

If you have an existing HSA with another provider, you can transfer your account to Fidelity at any time. You can open a new account with Fidelity and transfer your existing HSA to consolidate your accounts or take advantage of Fidelity's added HSA investing options and guidance.

To transfer your HSA to Fidelity, submit a request and they will do the rest. However, it's important to note that your existing HSA may be in two separate types of accounts: a bank account holding your cash balance and a brokerage account holding your investments. Both account types are eligible to be transferred, but a separate transfer request may be required for each one. Your current HSA provider can help you determine the right process and discuss your options.

Some financial institutions don't allow in-kind transfers of investments held in an HSA. If your HSA money is invested, you may be able to do an in-kind transfer into a self-directed HSA, which allows your HSA provider to transfer both your cash balance and your investments to Fidelity. You may need a separate transfer request for each.

Transfers to a Fidelity Go® HSA can be made in cash or in-kind, and if they are transferred in-kind, they will be liquidated and reinvested. However, you can transfer securities you don’t wish to liquidate into a Fidelity HSA®.

Fidelity's online guide to transferring assets can help you through the transfer process, and you can sign up to receive alerts during important steps. The transfer process can vary between institutions, so check with your current provider for specific transfer instructions.

You can invest any amount in a Fidelity HSA account

There is no minimum amount to open a Fidelity Health Savings Account (HSA)® and no minimum amount to start investing. You can invest any amount in a Fidelity HSA account.

Fidelity offers a robo-advisor service that chooses and manages your investments based on your long-term goals and risk tolerance. This service requires a minimum of $10 to start investing.

Fidelity also offers a self-directed HSA, where you can choose and manage your own investments. There are no account fees and no minimum to open an account. However, certain mutual funds may have minimum investment requirements.

You can transfer money from an IRA to a Fidelity HSA once in your lifetime

There are no fees for opening a Fidelity Health Savings Account (HSA)®, which you can invest yourself, or a Fidelity Go® HSA, which Fidelity manages and invests for you. However, with a Fidelity Go® HSA, your account balance must be at least $10 for Fidelity to invest your money according to the investment strategy you've chosen.

Fidelity HSAs® offered through Fidelity.com to individuals and employers have zero account fees and zero account minimums. However, there may be commissions, interest charges, and other expenses associated with transacting or holding specific investments (e.g. mutual funds) or selecting certain account features or types (e.g. managed accounts). When a Fidelity HSA® is offered as part of an employer's benefits package (which occurs through NetBenefits®), Fidelity charges the employer a record-keeping fee. This is a common fee charged by HSA providers, and may be up to $48 per year, but could be reduced or waived depending on the HSA balance. Employers may pass this fee on to their employees.

Now, to answer your question directly, you can transfer money from an IRA to a Fidelity HSA once in your lifetime. This is known as an IRA-to-HSA rollover. This can help you bolster your savings for qualified medical expenses. Moving money from an IRA to an HSA comes with a host of rules. Money moved as part of an IRA-to-HSA rollover counts toward the IRS's annual HSA contribution limit. That means in 2024, you can roll over $4,150 if you have coverage just for yourself and $8,300 if you have family coverage. This rises to $4,300 for self-only coverage and $8,550 for family coverage in 2025. Those 55 and older can make an additional $1,000 catch-up contribution. If both spouses are 55 or older, they may each make a $1,000 catch-up contribution. However, keep in mind that each HSA catch-up contribution must be made to a separate account.

HSA contributions that are made through an IRA-to-HSA rollover are not tax-deductible. Such a rollover would reduce the amount that you can contribute to an HSA for the given year, but would not otherwise be expected to impact your tax situation. IRA-to-HSA rollovers are also subject to the "testing period", which requires you to remain an eligible individual during the testing period. This includes remaining enrolled in an HSA-eligible health plan for 12 months post-rollover. If you change to an ineligible health plan during that time, you'll have to report the transferred amount on your tax return as income and pay an additional 10% penalty for an early withdrawal from your IRA.

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