Banks, brokerages, and HSA-specific custodians all offer accounts, but they differ in investment options and fees
You can open an HSA through your employer's plan, a bank, an online brokerage, or a company that specializes in HSA administration. The choice matters because different providers offer different investment options, fee structures, and ease of use. Some let you keep money in cash; others require you to invest it. Some charge monthly maintenance fees; others don't. Your employer may have already chosen a provider for you, in which case you enroll through their benefits system. If you're self-employed or your employer doesn't offer an HSA, you pick the provider yourself.
The account itself is portable—you own it, not your employer—so you can switch providers later if you find a better fit. But switching takes time and paperwork, so understanding your options upfront saves frustration.
Key Takeaways
- If your employer offers an HSA, enrollment usually happens during open enrollment or when you first become may be able to access, through your benefits portal or HR department.
- Banks typically offer HSA accounts with low or no fees but limited or no investment options, keeping your money in a savings account.
- Online brokerages and HSA custodians let you invest HSA funds in stocks, bonds, and mutual funds, but often charge monthly or annual fees.
- Self-employed people and those whose employers don't offer HSAs can open an account directly with any HSA provider without employer involvement.
- You can only contribute to an HSA if you're enrolled in a high-deductible health plan, regardless of where you open the account.
Employer-sponsored HSAs: enrollment through your benefits system
If your employer offers an HSA, you enroll during your company's open enrollment period or when you first become may be able to access (usually when you turn 26 or change jobs). The enrollment happens through your benefits portal, HR department, or benefits administrator—the same place you choose your health insurance. Your employer has already selected the HSA provider, so you don't choose the custodian; you just decide how much to contribute.
Some employers contribute money to your HSA as part of their benefits package. That contribution appears in your account automatically once enrollment closes. You can then add your own contributions up to the annual limit set by the IRS, which varies by whether you have individual or family coverage.
The advantage of an employer plan is simplicity: payroll deductions happen automatically, and your employer may cover administrative fees. The disadvantage is limited choice—you use the provider your employer selected, even if another would suit you better.
Banks: straightforward accounts with no investment options
Most major banks offer HSA accounts. You can open one online or in a branch if you already bank there, or you can open an HSA-specific account with a bank that doesn't require you to have a checking account with them. Banks like Fidelity Bank, HealthEquity (which operates as a bank custodian), and regional banks all offer HSA products.
A bank HSA works like a savings account: your money sits in cash earning a small interest rate, and you withdraw it to pay medical expenses. There are no investment options, no stock market risk, and usually no monthly fees—though some banks charge a small annual fee or require a minimum balance. This approach suits people who want simplicity and certainty, or who plan to spend their HSA money each year rather than save it long-term.
The tradeoff is that your money doesn't grow through investment. If you're young and plan to save your HSA for decades, a bank account may not maximize your account's potential.
Online brokerages and HSA custodians: investment options with fees
Companies like Fidelity, Vanguard, Charles Schwab, and Lively (an HSA-specific custodian) let you invest HSA money in stocks, bonds, mutual funds, and exchange-traded funds. These providers are custodians—they hold the account and execute trades—rather than banks. You can open an account directly with them online in minutes.
Investment-focused HSAs typically charge a monthly fee (usually $2 to $5) or an annual fee (usually $25 to $100), though some waive fees if you maintain a minimum balance or meet other conditions. Some also charge per-trade fees or fund expense ratios. Read the fee schedule carefully before opening an account, because fees compound over time.
These accounts suit people who plan to keep HSA money invested for years, treating the account as a long-term retirement savings vehicle. The ability to invest means your money can grow faster than it would in a bank account, but you also face market risk.
Self-employed and individual HSA accounts
If you're self-employed, a contractor, or your employer doesn't offer an HSA, you open an account directly with any HSA provider. You choose the custodian based on fees, investment options, and user experience. Many people in this situation use online brokerages or HSA-specific custodians because they offer more control and lower fees than banks.
You contribute money yourself (not through payroll deduction) and track contributions to may support you stay within the annual IRS limit. You'll receive a Form 5498-SA from your HSA provider each year, which you file with your taxes to document contributions.
The advantage is complete freedom to choose your provider. The disadvantage is that you're responsible for managing contributions and ensuring you remain enrolled in a high-deductible health plan—if you switch to a regular health plan, you can no longer contribute to your HSA, though you can still spend money already in it.
Comparing providers: what to check before opening
| Provider Type | Investment Options | Typical Fees | Best For |
|---|---|---|---|
| Bank HSA | Cash only (savings account) | $0–$50/year | People who spend HSA money each year; those who want simplicity |
| Online brokerage | Stocks, bonds, funds, ETFs | $25–$100/year or $2–$5/month | Long-term savers; people comfortable with investing |
| HSA custodian | Stocks, bonds, funds, ETFs | $25–$100/year or $2–$5/month | People who want HSA-specific features and support |
| Employer plan | Varies (often limited) | Often covered by employer | Employees; simplicity through payroll deduction |
Before opening an account, check the fee schedule, minimum balance requirements, and what happens if your balance falls below that minimum. Ask whether the provider charges per-trade fees or if mutual funds have expense ratios you'll pay on top of the account fee. Look at the investment menu if you plan to invest—some brokerages offer thousands of funds; others offer only a limited selection.
Also confirm that the provider is a legitimate HSA custodian. The IRS maintains a list of approved custodian types (banks, credit unions, insurance companies, and non-bank custodians). Any major financial institution or established HSA company will may have access to.
Moving your HSA to a different provider
You can transfer your HSA to a different custodian at any time. The process is called a trustee-to-trustee transfer: your old provider sends the money directly to your new provider, and no tax or penalty applies. You fill out a transfer form with your new provider, and they handle the rest—it usually takes one to two weeks.
Some people switch providers when they change jobs, when fees become too high, or when they want investment options their current provider doesn't offer. Keep in mind that if you have pending medical expense reimbursements from your old provider, complete those before transferring, or the new provider may not honor them.
Frequently Asked Questions
Can I have an HSA with my employer and also open one on my own?
No. You can only have one HSA at a time. If your employer offers one, you must use that account. If you want to switch providers, you transfer the balance to a new custodian rather than opening a second account. The IRS enforces this rule strictly to prevent people from exceeding annual contribution limits.
What if my employer's HSA provider charges high fees?
You can transfer your balance to a lower-cost provider using a trustee-to-trustee transfer. Your employer's contributions stay in the employer plan, but your own contributions and any employer money already in the account can move. Ask your HR department whether they allow transfers; most do, though some require you to wait until open enrollment.
Do I need to invest my HSA money?
No. You can keep it in cash in a bank HSA and spend it as needed. However, if you don't spend it, the money sits earning minimal interest. Many people use a hybrid approach: keep enough cash for near-term medical expenses and invest the rest for long-term growth.
What happens to my HSA if I leave my job?
Your HSA stays yours. You own the account, not your employer. You can leave it with your employer's provider, transfer it to a new custodian, or both (if you have multiple accounts, consolidate them into one). You can continue contributing if you remain enrolled in a high-deductible health plan through a spouse's employer, the marketplace, or self-employment.
Can I open an HSA online, or do I have to go to a bank branch?
Most HSA providers let you open an account entirely online. Banks, brokerages, and HSA custodians all offer online enrollment. You'll need your Social Security number, proof of high-deductible health plan enrollment, and a way to fund the account (bank account or payroll deduction). The whole process usually takes 10 to 15 minutes.