Most people never choose their HSA custodian — an employer does. Here are the five charges that separate a good provider from an expensive one, and how the main options compare.
Almost nobody chooses their HSA. An employer selects a custodian, payroll deposits land there, and that is where the money sits — often for a decade, often losing a percent a year to charges the account holder never reads.
You are not stuck with it. HSAs are individually owned and portable, and you can move yours while still employed and still receiving employer contributions into the old one. What you cannot usually do is redirect the payroll deposit — so the realistic setup is employer account receives, personal account accumulates, with a periodic transfer between them.
The decision is not complicated. It comes down to five numbers.
The most common charge and the most corrosive. A $3.00 monthly fee is $36 a year, which sounds trivial and is 1.2% annually on a $3,000 balance — more than most index funds charge, for doing nothing.
Employer-sponsored custodians frequently waive this while you are employed and start charging the moment you leave. That is the classic trap: the account looks free for five years and then quietly starts eroding.
Good providers charge nothing. Lively's published individual pricing is $0 monthly, with $0 for excess contributions, point-of-sale, minimum balance and reimbursements. Fidelity's HSA has long been marketed with no account fee and no minimum to open, which is why it is the default recommendation for self-directed investors — verify the current schedule on their own fee page before you move anything, as these do change.
This is the fee most people discover only when they try to invest and cannot.
Two separate obstacles exist, and providers use one, both, or neither:
Lively publishes both options explicitly: Schwab Health Savings Brokerage Account access for $24 a year, or free if you keep a $3,000 cash balance. Its managed alternative, the HSA Guided Portfolio, costs 0.50% annually.
Read that pairing carefully, because it is the general shape of the decision everywhere. A $3,000 idle cash balance is not free — at 4% it is roughly $120 a year of forgone return to avoid a $24 fee. If your balance is large, pay the fee and invest the cash. If it is small, the threshold may be the better deal.
Why your custodian may be blocking you entirely is covered in why your HSA won't let you invest.
A custodian can charge you nothing and still cost you the most, by offering only funds with expense ratios of 0.60% and up.
Compare the menu, not the marketing. A true brokerage window — where you can buy any ETF — is worth more than any fee waiver, because it lets you hold a total-market index fund at a few basis points. A curated menu of twenty proprietary funds is where the money actually goes.
Also check for a managed-account layer: some custodians add 0.30–0.50% on top of fund costs for an allocation you could replicate with two tickers.
Check this before you open an account, because it is the one charge you only meet when you have already decided to leave. $25 is typical; some charge nothing; a few charge per-account closing fees on top.
It is not a reason to stay anywhere. It is a reason not to be surprised.
Add the threshold, the fee waiver minimum, and anything the provider keeps un-invested by default. Then ask what interest it pays. Many custodians pay near zero on cash while the published rate applies only above a balance most people never reach.
This is the largest hidden cost in the category and it never appears on a fee schedule.
Fidelity — the consensus choice for people who want to invest. Full brokerage, no account fee, no investment minimum, and the same fund universe as a taxable account. Weakest on employer-side benefits administration, which is why employers rarely pick it.
Lively — the consensus alternative, and the one most searched by name. Free for individuals and families, with the Schwab brokerage option above and a managed portfolio for people who do not want to pick funds. Clean interface, and pricing published plainly, which is rarer than it should be.
HealthEquity, Optum, Further and the other employer-side administrators — these win benefits-administration contracts, which is how most people end up with them. They are perfectly safe custodians. They typically carry a monthly fee (often employer-paid while you are employed), an investment threshold, and a narrower fund menu. None of that is a reason to refuse employer contributions; it is a reason to move the balance out periodically.
Banks and credit unions — fine for spending, poor for accumulating. Usually no investment option at all.
The honest summary: if your HSA is a spending account, the custodian barely matters. If it is a retirement account — which is what it becomes once you adopt the shoebox strategy — the custodian is the second most important decision you make about it, after deciding not to spend from it.
The arrangement most long-term HSA holders end up with:
Transfers are unlimited, are not taxable, and do not appear on Form 8889. Do not use the 60-day rollover method for this — it is limited to once per 12 months and carries a 20% penalty if you miss the deadline. The difference is explained in rollover vs transfer.
One thing a transfer does not move: your receipts. Custodian portals lose them, and the expense history that justifies a future reimbursement is your responsibility, not theirs. Export everything before you close an old account — see how long to keep HSA receipts.
Can I have more than one HSA? Yes, as many as you like. The contribution limit is per person per year across all of them, not per account.
Will my employer stop contributing if I move the money? No. Contributions go to the account they are directed to; what you do with the balance afterwards is not their business.
Is the interest on HSA cash taxable? No. Interest and investment gains inside an HSA are untaxed — that is the middle leg of the triple tax advantage.
Does moving providers reset anything? No. Your contribution limit, your eligibility and your unreimbursed expense history are all unaffected.