HSA Bank to ElfCU for free?

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HSA Bank to ElfCU for free?

Postby wholeinone04 » Mon Jan 20, 2014 5:26 pm

I read TFB's article today: http://thefinancebuff.com/best-hsa-prov ... money.html and am ready to switch.

I have about 10k with HSA Bank(half in a savings account and half in an investment account) and I want to transfer it to ElfCU since they have no fees on savings/investing accounts with TDA. I want to do a trustee to trustee rollover of all my money with HSA bank to ElfCU.

HSA Bank charges $25 account closing fee so is there a way to avoid that fee? Can I leave $1 behind or just transfer all the money out and not close the account? They have a $3 monthly fee if your account balance isn't greater than $4,925 but not sure how they could deduct that if my account balance is zero or even $1.

Second question involves an in-kind transfer of my funds invested with TDA. Since I'm switching to a new hsa provider but old and new used TDA as investment provider, how the heck will this work? I'm thinking about just filling out the rollover form with ElfCU and letting them figure it all out. Any ideas or anyone done this?
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Re: HSA Bank to ElfCU for free?

Postby foglifter » Mon Jan 20, 2014 11:26 pm

My HSA is also with HSABank, 5K in the core account and ~15K is invested at TDA. If i were you I'd do nothing. True, the credit union pays more in the core account, but this rate is not guaranteed to stay that high. I've seen this happening many times with high-yield savings accounts and got tired of yield chasing. It's relatively easy to move a regular savings account around, but not that easy in case of an HSA with a sufficient balance invested in a brokerage account. So HSABank in my opinion is good enough and losing a few bucks a year by keeping 5K at 0.3% in the core savings is not a big deal.

Also, the HSA welcome kit states you need to keep at least $2500 in the core account to be able to open the brokerage account at TDA - so it's not exactly "free".

As to the assets transfer - I'm afraid HSABank would require you to sell everything at TDA and move cash back to the core account before initiating the transfer.
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Re: HSA Bank to ElfCU for free?

Postby alisa4804 » Mon Jan 20, 2014 11:36 pm

transfer it to ElfCU since they have no fees on savings/investing accounts with TDA.


We also have HSA Bank. There are no fees at the linked TDA account either, if you buy the "fee free" ETFs. After you set up your TDA account, look over in the left hand column for free ETF info. There is a good selection of free ETFs, including some great Vanguard choices.
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Re: HSA Bank to ElfCU for free?

Postby wholeinone04 » Tue Jan 21, 2014 2:25 am

foglifter wrote:My HSA is also with HSABank, 5K in the core account and ~15K is invested at TDA. If i were you I'd do nothing. True, the credit union pays more in the core account, but this rate is not guaranteed to stay that high. I've seen this happening many times with high-yield savings accounts and got tired of yield chasing. It's relatively easy to move a regular savings account around, but not that easy in case of an HSA with a sufficient balance invested in a brokerage account. So HSABank in my opinion is good enough and losing a few bucks a year by keeping 5K at 0.3% in the core savings is not a big deal.

Also, the HSA welcome kit states you need to keep at least $2500 in the core account to be able to open the brokerage account at TDA - so it's not exactly "free".

As to the assets transfer - I'm afraid HSABank would require you to sell everything at TDA and move cash back to the core account before initiating the transfer.


Oops sorry I should have clarified. The main reason why I want to switch is not to chase the yield - I know what you mean how the banks are always temporarily raising yields - but instead to invest all of my HSA money. Right now with HSA Bank, I have to leave 5k in cash at .3% like you mention and another 5k I can invest(total 10k with HSA Bank), but with Elfcu I can invest all 10k, there is no minimum on the savings account side. I think being able to invest an additional 5k is worth it to transfer - what about you?
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Re: HSA Bank to ElfCU for free?

Postby foglifter » Tue Jan 21, 2014 2:47 am

I see your point. What I meant was if you have a family coverage (i.e. eligible for a maximum contribution) and you're planning to use your HSA for long-term investing then in a few years almost all your HSA money will be invested at TDA and the fact that you need to keep 5K in a core won't bother you that much.

There's also a good point that sometimes gets overlooked due to the way it's worded in the IRS instructions - after the age 65 HSA funds can be spent on anything just as if it were a traditional IRA. So I actually consider HSA as a part of my retirement portfolio.
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Re: HSA Bank to ElfCU for free?

Postby wholeinone04 » Tue Jan 21, 2014 3:04 pm

foglifter wrote:I see your point. What I meant was if you have a family coverage (i.e. eligible for a maximum contribution) and you're planning to use your HSA for long-term investing then in a few years almost all your HSA money will be invested at TDA and the fact that you need to keep 5K in a core won't bother you that much.

There's also a good point that sometimes gets overlooked due to the way it's worded in the IRS instructions - after the age 65 HSA funds can be spent on anything just as if it were a traditional IRA. So I actually consider HSA as a part of my retirement portfolio.


Ooh that makes sense actually. I max out single contribution($3,300) but in 6 months when I get married, I'll probably switch to family($6,550) so that 5k will become a smaller and smaller portion.

And you're right on about after 65 use of HSA funds! That's why I tell everyone to max out HSA before 401(k), if you use it for medical great and if not just use it like a reg. 401(k). I actually pay for everything out of pocket right now so in X years I'll be able to cash out X year's worth of expenses and spend it on whatever I want.
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Re: HSA Bank to ElfCU for free?

Postby RyeWhiskey » Tue Jan 21, 2014 3:23 pm

I think you're missing a key option:

Use HSA Bank, invest all of the money there within in low cost Vanguard ETFs, pay the $66/year. This is what I currently do and my funds more than cover the $66/yr. Unless the 5k is a part of your emergency fund, why leave that money sitting at 0.3% for a mere $66/year. At 10k, the $66/yr amounts to a 0.66% ER, but over time that decreases substantially. I did the math when I was trying to figure it out and it's a much better option to invest the total. This all said, I do like the idea of moving my money from a bank to a credit union so I'll look into it. :beer
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Re: HSA Bank to ElfCU for free?

Postby RyeWhiskey » Tue Jan 21, 2014 3:30 pm

If anyone does decide to attempt to move from HSA Bank to ElfCU, could they please post here with whether or not they can move the assets at TDA without selling? Would be very much appreciated.
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Re: HSA Bank to ElfCU for free?

Postby bkh8 » Tue Jan 21, 2014 4:13 pm

I called TD Ameritrade about this today and they said that I needed to sell my funds and move it all back into HSA first. Then HSA would move it to ELFCU. I am not sure how to get around the HSA charge.
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Re: HSA Bank to ElfCU for free?

Postby alisa4804 » Tue Jan 21, 2014 4:28 pm

There was another thread on this forum (I don't have the link; maybe someone else will remember) where someone shared they phoned HSABank and learned they could pay the monthly fees (for low balances) directly, out of pocket, rather than it coming out of their HSABank balance. Yes, the work-arounds for HSAs can be complicated, but as RyeWhiskey mentioned, the gain from your HSA funds invested in TDA ETF's can greatly outweigh the small fees for maintaining the HSABank account. Hope this helps.
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Re: HSA Bank to ElfCU for free?

Postby hoppy08520 » Tue Jan 21, 2014 4:28 pm

bkh8 wrote:I called TD Ameritrade about this today and they said that I needed to sell my funds and move it all back into HSA first. Then HSA would move it to ELFCU. I am not sure how to get around the HSA charge.

This is documented on p. 10 of this "Welcome Kit" PDF:

http://www.elfcu.org/clientuploads/2013 ... omeKit.pdf

There are several pages in this doc about the linkage to TD Ameritrade, but I couldn't find anything in the PDF about trading fees.

On a slightly separate topic, on TFB's page, there was one comment from someone who got his employer to switch to his own preferred HSA custodian (in this case, HSA Administrators). This was in a reply to comment #2:
My employer set up accounts for us at Bank of America, but I opened an account for myself at HSA Administrators and got my employer to change the direct deposit info (routing/transit and account #). It worked, though it did require some communication with the new custodian. And I still avoid FICA. The main downside is that my employer isn’t paying the fees on my account, but you can’t have everything.

This is interesting to read because I've seen conflicting information about whether an employee can do this or not. Somewhere else I read you can't switch your payroll contributions to another custodian, but this comment contracts that. I imagine it's up to whether you can convince your payroll/HR department to go through the hassle of doing this, if you don't like the HSA your employer chose.
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Re: HSA Bank to ElfCU for free?

Postby 4th and Inches » Tue Jan 21, 2014 4:42 pm

Thanks for sharing. I'll have to look into this.
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Re: HSA Bank to ElfCU for free?

Postby RyeWhiskey » Tue Jan 21, 2014 4:53 pm

foglifter wrote:Also, the HSA welcome kit states you need to keep at least $2500 in the core account to be able to open the brokerage account at TDA - so it's not exactly "free".


I just read the kit and the wording looks to me like you merely need $2500 at the time of the enrollment. After enrolling you can move it all into TDA.
ElfCU HSA Welcome Kit wrote:Participation Requirements
In order to enroll in the investment program, you must have an account balance of at least $2,500 in your HSA at the time of enrollment. Eligibility does not constitute enrollment in the program. You must actively elect to enroll in order to use the investment funding provided to you through TD AMERITRADE.
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Re: HSA Bank to ElfCU for free?

Postby wholeinone04 » Tue Jan 21, 2014 7:34 pm

RyeWhiskey wrote:I think you're missing a key option:

Use HSA Bank, invest all of the money there within in low cost Vanguard ETFs, pay the $66/year. This is what I currently do and my funds more than cover the $66/yr. Unless the 5k is a part of your emergency fund, why leave that money sitting at 0.3% for a mere $66/year. At 10k, the $66/yr amounts to a 0.66% ER, but over time that decreases substantially. I did the math when I was trying to figure it out and it's a much better option to invest the total. This all said, I do like the idea of moving my money from a bank to a credit union so I'll look into it. :beer


Haha I wrote a post about this too on my blog and one of the commenters brought up this valid point. The only reason I could think of for not doing this is that I abhor any type of fees even though the opportunity cost most likely outweighs the fee. And if I were to go this route, I might as well roll over to Elfcu, it's really pretty easy. All you have to do is fill out one form with your new custodian and they'll take care of the rest.

It would cost me $25 to close my HSA Bank account and $5 to open an Elfcu account(no fees after that).

bkh8 wrote:I called TD Ameritrade about this today and they said that I needed to sell my funds and move it all back into HSA first. Then HSA would move it to ELFCU. I am not sure how to get around the HSA charge.


Yea I think that's the easiest solution, not a big deal to be out of the market for a week with so little IMO. Don't see a way to avoid the HSA Bank closing fee either.
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Re: HSA Bank to ElfCU for free?

Postby ColorMeSkeptical » Mon Jan 27, 2014 11:06 am

I must be missing something, maybe someone on here will be kind enough to fill in the blanks?

If the HSA account is free of any cost (other than a $5 donation for joining the credit union), what is ELFCU's motivation for sponsoring such an account? Are the fees associated w/ creating/owning the account guaranteed for any length of time., ie., can ELFCU change the fee structure at any time? The same for TDAmeritrade, can they change the quarterly "investment" fee to anything they want at any time? Because right now it seems like a no brainer, but of course the devil is generally in the details :?
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Re: HSA Bank to ElfCU for free?

Postby wholeinone04 » Mon Jan 27, 2014 6:15 pm

I suppose they make money on some people's accounts that hold large amounts of cash(since they can loan that money out like normal banks do) and lose money on other people's accounts(like mine if I invest all the money in TDA). Not sure though, anyone have a better answer?
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Re: HSA Bank to ElfCU for free?

Postby ajcp » Mon Jan 27, 2014 9:07 pm

ColorMeSkeptical wrote:I must be missing something, maybe someone on here will be kind enough to fill in the blanks?

If the HSA account is free of any cost (other than a $5 donation for joining the credit union), what is ELFCU's motivation for sponsoring such an account? Are the fees associated w/ creating/owning the account guaranteed for any length of time., ie., can ELFCU change the fee structure at any time? The same for TDAmeritrade, can they change the quarterly "investment" fee to anything they want at any time? Because right now it seems like a no brainer, but of course the devil is generally in the details :?


There are any number of free bank accounts out there. The motivations are the same. But yes, either one of them can change their fees whenever they want.
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Re: HSA Bank to ElfCU for free?

Postby foglifter » Wed Jan 29, 2014 4:05 pm

RyeWhiskey wrote:If anyone does decide to attempt to move from HSA Bank to ElfCU, could they please post here with whether or not they can move the assets at TDA without selling? Would be very much appreciated.


I gave it a try... what a bummer. :(
Sorry I posted my experience in a different thread:
viewtopic.php?f=1&t=126901&p=1942227#p1942227
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