Optum Bank HSA using Admiral shares on Vanguard funds

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classicjazzfan
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Optum Bank HSA using Admiral shares on Vanguard funds

Post by classicjazzfan » Wed Apr 08, 2015 9:01 pm

Bogleheads shopping for an HSA provider might wish to know that Optum Bank, which services my employer-based HSA, announced today that during the week of April 20 it will be converting all its HSA accounts held in Vanguard funds from Investor class shares to Admiral class shares, regardless of the size of the account balance. My Optum HSA is in Wellington (VWELX), which normally requires a minimum of $50,000 to qualify for Admiral shares. So with an HSA balance well below that daunting threshold, this change is welcome news indeed for me. FYI, Optum's other Vanguard options are:

S&P 500 (VFINX)
Small Cap (NAESX)
Mid Cap (VIMSX)
Equity-Income (VEIPX)
Global Equity (VHGEX) [this fund doesn't offer Admiral shares]

This post is meant only to be informational, not promotional (although I've been very happy with Optum Bank and its $5.50 per month service/investment charge).

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vitaflo
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by vitaflo » Wed Apr 08, 2015 9:52 pm

Thanks for the info! That's great news. I've heard there's ways to get around the service charge, or does that depend on what type of Optum account it is?

classicjazzfan
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by classicjazzfan » Wed Apr 08, 2015 10:22 pm

Vitaflo:

If there are ways to evade the fees, I'd be happy to avail myself of them too. The fees vary depending upon which of the 3 account types one has, as shown here:

http://www.optumbank.com/our-products-a ... ated-fees/

The fees may be lower on employer-based accounts. I started out in the account called Health eSaver, wherein the standard monthly maintenance fee is $3 and a balance of $5000 is needed to waive it. Because my account was employer-based, however, the monthly fee was reduced to $1 and it could be waived with a balance of just $500. Unfortunately, this "employee break" doesn't apply to the Health eInvestor account, which I'm in now. I'm willing to pay the $3 monthly maintenance fee because evading it requires letting $5000 sit virtually idle. Plus, I need leave only $500 in the (minimal) "interest-bearing" portion of the HSA account in order to put the rest of my money in the "investment" portion.

cricket49
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by cricket49 » Thu Apr 09, 2015 11:04 am

Thank you for this information.

I called Optum Bank and will be transferring two HSA accounts to them.
Expect the best. Prepare for the worst.

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vitaflo
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by vitaflo » Fri Apr 10, 2015 11:07 am

classicjazzfan wrote:Vitaflo:

If there are ways to evade the fees, I'd be happy to avail myself of them too. The fees vary depending upon which of the 3 account types one has, as shown here:

http://www.optumbank.com/our-products-a ... ated-fees/

The fees may be lower on employer-based accounts. I started out in the account called Health eSaver, wherein the standard monthly maintenance fee is $3 and a balance of $5000 is needed to waive it. Because my account was employer-based, however, the monthly fee was reduced to $1 and it could be waived with a balance of just $500.


How do you tell what account type you have? My wife has the account through her employer, and I have yet to see any fees show up (though we have yet to invest any of the balance), but I don't see anywhere that shows the type of account we have. Probably doesn't matter much in our case since her employer adds funds for her, which would easily pay for any fees we have (for now). Was just curious.

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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by logicon » Fri Apr 10, 2015 12:50 pm

vitaflo wrote:
classicjazzfan wrote:Vitaflo:

If there are ways to evade the fees, I'd be happy to avail myself of them too. The fees vary depending upon which of the 3 account types one has, as shown here:

http://www.optumbank.com/our-products-a ... ated-fees/

The fees may be lower on employer-based accounts. I started out in the account called Health eSaver, wherein the standard monthly maintenance fee is $3 and a balance of $5000 is needed to waive it. Because my account was employer-based, however, the monthly fee was reduced to $1 and it could be waived with a balance of just $500.


How do you tell what account type you have? My wife has the account through her employer, and I have yet to see any fees show up (though we have yet to invest any of the balance), but I don't see anywhere that shows the type of account we have. Probably doesn't matter much in our case since her employer adds funds for her, which would easily pay for any fees we have (for now). Was just curious.


I have Optum through my employer as well. I cannot find anything about fees for my account online but I do recall receiving documentation stating I had zero fees. I believe it was through snail mail.

classicjazzfan
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by classicjazzfan » Fri Apr 10, 2015 1:03 pm

Vitaflow:

You're right. Nowhere on my account website either is there any indication of which of the various Optum accounts I'm in. (Providing that information would be helpful and I would think easy for Optum to effectuate.) I know which account I'm in only because I received a "welcoming kit" from Optum shortly after my employer opened my account. Inside the kit was a letter that among other things informed me that I was in the Health eAccess account, which seems to be the default account (suitable for people--probably most--who use the HSA like an FSA). After I switched to the eInvestor account, I received another letter from Optum specifically stating the change from the one account to the other. If your wife didn't receive or retain the welcoming kit, I should think her employer could tell her which account she is in (as, of course, could Optum). Unless your situation is different, I believe the eInvestor account is the best option for people wishing to invest the lion's share of their HSA money at Optum.

sunspotzsz
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by sunspotzsz » Fri Apr 10, 2015 1:07 pm

I wish my employer uses Optum Bank!

:(

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brisni
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by brisni » Fri Apr 10, 2015 1:19 pm

I use Optum through my employer and they take $3 per month. I just wish they had an international index and better bond choices.

cricket49
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by cricket49 » Fri Apr 10, 2015 2:44 pm

sunspotzsz wrote:I wish my employer uses Optum Bank!

:(


My employer uses Health Equity and most of my money is in the investment section. The funds available are not idea and have high fees and expenses.

I am transferring the bulk of my money to Optum Bank HSA to invest in Vanguard funds. I spoke to a rep at Optum today and she confirmed with the OP that Vanguard Admiral Funds will be available the end of April. They are not on the Vanguard website at this time but the site should be updated in April or May. She told me these funds will be available whether you have an independent account (like mine) or through an employer.

My HSA contributions will continue to be deposited in Health Equity through my employer and when the account reaches a high balance I will transfer the money to Optum.
Expect the best. Prepare for the worst.

Nicolas
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by Nicolas » Fri Apr 10, 2015 8:35 pm

Huzzah! I'm already invested with Optum Bank for my HSA -- 100% in NAESX. My employer picks up my fees. But after retirement I'll be responsible for the fees.

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vitaflo
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by vitaflo » Sat Apr 11, 2015 5:40 pm

classicjazzfan wrote:You're right. Nowhere on my account website either is there any indication of which of the various Optum accounts I'm in. (Providing that information would be helpful and I would think easy for Optum to effectuate.) I know which account I'm in only because I received a "welcoming kit" from Optum shortly after my employer opened my account. Inside the kit was a letter that among other things informed me that I was in the Health eAccess account.


Found the welcome kit. We're in the eAccess HSA. However, our monthly maintenance fee has been waived. Investment acct fees are $3/mo with a $2k balance required to invest funds. That seems fine for now.

How did you change your account type? Just call up Optum and simple as that? They just change your account to any of the others you want?

classicjazzfan
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by classicjazzfan » Sat Apr 11, 2015 9:36 pm

vitaflo wrote:Found the welcome kit. We're in the eAccess HSA. However, our monthly maintenance fee has been waived. Investment acct fees are $3/mo with a $2k balance required to invest funds. That seems fine for now.

How did you change your account type? Just call up Optum and simple as that? They just change your account to any of the others you want?


Vitaflow:

Correct, a telephone call (plus an additional follow-up call) to Optum achieved the account change. It took about a week and a half for the new account to kick in.

Do I understand you correctly that you're currently in eAccess and intend to stay there for investment purposes because the $2 monthly maintenance fee is being waived, leaving you with just the monthly investment fee of $3? If you run the numbers, you'll see that as long as your investment account earns more than 2% a year, you'll end up with more money in eInvestor than in eAccess, despite higher monthly fees in eInvestor ($3 maintenance + $2.50 investment) than in eAccess ($2 maintenance + $3 investment). This is so even if the $2 eAccess maintenance fee is waived.That's because eAccess requires a $2000 balance in the non-investment portion of the HSA to make investments, whereas eInvestor requires just $500. That extra $1500 sitting virtually idle in eAccess takes a toll. The bigger your balance and the bigger your rate of return, the bigger the toll.

For example, assume a total HSA balance of $10,000. In eInvestor, $9500 would be in the investment portion and $500 would be in the non-investment portion. 2% earned on $9500 = $190, plus 0.05% earned on $500 = $2.50, minus $66 in annual fees, leaves $126.50 in earnings. In eAccess, $8000 would be in the investment portion and $2000 would be in the non-investment portion (earning no interest). 2% earned on $8000 = $160, minus $36 in annual fees, leaves $124 in earnings. eInvestor wins, albeit by a hair. But the bigger your balance and the bigger your rate of return, the bigger the margin of eInvestor over eAccess. This is why I switched from eAccess to eInvestor when Optum offered the Vanguard funds and I wanted to invest in them.

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camillus
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by camillus » Sat Apr 11, 2015 11:44 pm

Would anyone consider leaving HSA Bank or HSA Adminstrators for Optum?

classicjazzfan
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by classicjazzfan » Sun Apr 12, 2015 10:53 am

camillus wrote:Would anyone consider leaving HSA Bank or HSA Adminstrators for Optum?

My original post was not meant to be a ringing endorsement of Optum Bank's HSA suite, although I am currently satisfied with my particular plan. Other good choices exist (such as HSA Administrators and HSA Bank) that might suit some people better than Optum, depending on their goals in using the HSA, the investment choices they want, the fees they're willing to pay for those choices, and their comfort with incorporating a brokerage service into their HSA scheme.

When I first started with Optum Bank's HSA in 2010 (only because that's where my employer put my payroll HSA contributions), I thought it was a dud. Zero interest and the usual mediocre/expensive investment options. The only thing it had going for itself was the low minimum balance ($500) and my employer picking up the monthly $1 maintenance tab.

For the first four years of my HSA experience, I was not interested in investing any of the money, just keeping it safe and earning the most interest on it that I could at a financially stable institution. (Wanting to stay in the 15% tax bracket as we do Roth conversions between the time I retire in five years at 66 and begin drawing full SS at 70, my wife and I plan to use the HSA funds as a tax-free income supplement for her SS disability and employer pension and my SS spousal benefit during those four years.) So early in each January, I fully funded my Optum HSA and then via an Optum check rolled it over (minus the $500 minimum-balance required) to another HSA (first Adirondack Trust when they were paying 3% to 5% APY and then, after Adirondack dropped its rates and raised its fees, to Lake Michigan Credit Union where most of our HSA money is now, earning 2% with 0 fees).

By last fall, we had enough "safe" HSA money at LMCU to allow us to consider investing a portion of it. Like many people, I considered HSA Administrators and HSA Bank, finding features I liked and features I disliked. Only when Optum fortuitously announced last fall that it was adding several Vanguard funds to its investment lineup did it become an attractive option for me, especially since it was already my employer-based plan, thereby obviating the need for any more rollovers elsewhere. The pending move to Admiral shares is another plus.

To be sure, Optum offers only a few Vanguard funds compared with the competition. No "international" choice may be a deal-breaker for some people (although that could change since HSA investment suites seem always to be a work in progress). For our particular needs, though, Wellington is perfect. In short, I would respectfully advise anyone looking for an HSA (and especially anyone considering switching HSAs) to look carefully before leaping.

TIAX
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by TIAX » Sat May 21, 2016 7:13 pm

I note that Optum Bank now has Vanguard Total Stock Market Index Admiral (VTSAX) as an option

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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by tludwig23 » Sat May 21, 2016 7:24 pm

camillus wrote:Would anyone consider leaving HSA Bank or HSA Adminstrators for Optum?


HSA Bank allows you to invest through TD Ameritrade, which offers 32 different commission-free Vanguard ETFs. Since the ER of the ETFs is the same as the ER of the Admiral share class of the mutual fund (where one exists), I don't see any great advantage to moving. Optum and HSA Bank seem roughly equivalent to me, and I think I'd be happy with either, but unlikely to go through the hassle of moving from one to the other.
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GS22
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by GS22 » Sat May 21, 2016 8:28 pm

Hi all........a previous poster mentioned Lake Michigan Credit Union earning 2%. The best I can see on their site is 2%. Maybe they lowered since that post. I have been searching for best interest rates for my 50K HSA and Connexus seems great-over 15K is when 2% kicks in. Their tier levels would provide me with the best return (and NCUA insured). Anyone have experience with them. Be well.......

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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by GS22 » Sat May 21, 2016 8:41 pm

...oops, I meant LMCU best rate is 1% as far as I can see.....

John Laurens
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by John Laurens » Fri Jan 13, 2017 3:53 pm

Optum just started charging me a 0.03% "investment fee". Been with them more than 5 years. Always keep more than the minimum in the bank portion. Have 35k in the investment side. This is new. Really aggravating.

John

TIAX
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by TIAX » Sat Jan 14, 2017 4:36 am

John Laurens wrote:Optum just started charging me a 0.03% "investment fee". Been with them more than 5 years. Always keep more than the minimum in the bank portion. Have 35k in the investment side. This is new. Really aggravating.

John

This is probably it - https://broker.uhc.com/articleView-16703

whitecliff
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by whitecliff » Mon Feb 27, 2017 1:39 pm

TIAX wrote:
John Laurens wrote:Optum just started charging me a 0.03% "investment fee". Been with them more than 5 years. Always keep more than the minimum in the bank portion. Have 35k in the investment side. This is new. Really aggravating.

John

This is probably it - https://broker.uhc.com/articleView-16703



I was signing up last night and saw this. I called two different service reps to confirm no fees and both said yes no fees. they were both clueless. So now there is the 0.03% monthly fee, is optum still the best place for HSA investment? If not where is?

thanks

Mr.Wu
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by Mr.Wu » Mon Feb 27, 2017 3:10 pm

Does anyone know if a brokerage initiated fund transfer like what's in this thread results in capital gain or loss? I live in NJ so HSA capital gain is taxable.

Also is the monthly investment fee .03% standard for all HSA accounts? I have it through employer and it says 0.00% fee.

auggiedoggies
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by auggiedoggies » Mon Feb 27, 2017 3:41 pm

cricket49 wrote:
sunspotzsz wrote:I wish my employer uses Optum Bank!

:(


My employer uses Health Equity and most of my money is in the investment section. The funds available are not idea and have high fees and expenses.

I am transferring the bulk of my money to Optum Bank HSA to invest in Vanguard funds. I spoke to a rep at Optum today and she confirmed with the OP that Vanguard Admiral Funds will be available the end of April. They are not on the Vanguard website at this time but the site should be updated in April or May. She told me these funds will be available whether you have an independent account (like mine) or through an employer.

My HSA contributions will continue to be deposited in Health Equity through my employer and when the account reaches a high balance I will transfer the money to Optum.


Really? Do the fund options change depending on your employer? I have Health Equity and I am invested in VIIIX, and I do get charged a .03% fee.....although oddly enough, when I go to "add to portfolio", VIIIX isn't available....


EDIT:


After doing a bit more research and placing a call to Health Equity, that .033% number is a monthly number. The annual ER is actually going to be .42% after April 1st, all in for all fees. That's kind of high for VIIIX, but I don't know the cost for Optum Bank. Is it comparable?

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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by smartpants » Tue Mar 07, 2017 11:42 pm

Do the fund options change depending on your employer?

Interesting thought. My account was moved from Wells Fargo to Optum at the beginning of the year.
I had researched them prior and was excited to see that they are offering Vanguard funds. Looking at the list again now I only see a quite questionable and expensive selection of old WF fonds.

    American Beacon Large Cap Value
    Columbia Mid Cap Index
    Delaware Small Cap Value
    Dreyfus Small Cap Stock Index
    Goldman Sachs Small Cap Value
    RidgeWorth Mid Cap Value Equity
    WF Core Bond Fund
    WF Discovery
    WF Diversified Equity
    WF Diversified International
    WF Dow Jones Target 2010
    WF Dow Jones Target 2020
    WF Dow Jones Target 2030
    WF Dow Jones Target 2040
    WF Dow Jones Target 2050
    WF Dow Jones Target Today
    WF Global Opportunities
    WF Government Money Market
    WF Growth
    WF Growth Balanced
    WF High Yield Income Fund
    WF Index
    WF Large Cap Growth
    WF Moderate Balanced
    WF Small Company Growth

Can anyone confirm this?

Lynn1987
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by Lynn1987 » Thu Mar 16, 2017 9:30 pm

smartpants wrote:Do the fund options change depending on your employer?

Interesting thought. My account was moved from Wells Fargo to Optum at the beginning of the year.
I had researched them prior and was excited to see that they are offering Vanguard funds. Looking at the list again now I only see a quite questionable and expensive selection of old WF fonds.

Can anyone confirm this?


Apparently the fund offerings do vary with different employers. My employer switched from Health Equity to Optum this year, as part of a switch in our health insurance from Blue Cross to United Healthcare. Optum is evidently part of United Healthcare, as the link to the HSA is even on UHC's website. I had planned to switch to Saturna, but for various reasons am leaning now toward just placing everything in Optum – there are some good fund offerings. Sadly, there is the .03% monthly investment fee, which is capped at $10/month. I have about $30k to switch over, so not too far from that cap. Need to do it soon as the previous HSA, HealthEquity, has started charging a $3.75 monthly fee, on top of their .033% investment fee. :annoyed
American Funds Capital World Gr&Inc F2* WGIFX International
BlackRock Equity Dividend Inst MADVX Equity
Fidelity Low-Priced Stock FLPSX Mid Cap Value
John Hancock Fdmlt Large Cap Core JLVIX Equity
Lord Abbett High Yield - I* LHYFX Fixed Income
Neuberger Berman Genesis Fund - INST NBGIX Equity
Oppenheimer Developing Markets Inst ODVIX International
T. Rowe Price Blue Chip - I* TBCIX Large Cap Growth Stock
Vanguard 500 Index - A* VFIAX Indexed
Vanguard Equity-Income - A* VEIRX Large Cap Value
Vanguard Extended Market Index Inst* VIEIX Mid Cap Index
Vanguard Global Equity * VHGEX World Stock-Large Blend
Vanguard Healthcare* VGHAX Alternative Blend
Vanguard Inflation-Protected Inst* VIPIX Inflation-protected Bond
Vanguard Life Strategy-Growth* VASGX Aggressive Allocation
Vanguard LifeStrategy-Conservative Growth* VSCGX Conservative Allocation
Vanguard LifeStrategy-Moderate Growth* VSMGX Moderate Allocation
Vanguard Mid Cap Index Inst* VMCIX Mid Cap Blend
Vanguard REIT Index Inst* VGSNX Alternative Blend
Vanguard Short-Term Federal Adm VSGDX Short Term Bond
Vanguard Short-Term Investment Grade Inst VFSIX Short
Vanguard Small Cap Index Inst* VSCIX Small Cap Index
Vanguard Total Bond Mkt Port* VBTIX Fixed Income
Vanguard Total Stock Market Inst* VITSX Large Cap Blend
Vanguard Wellington - A* VWENX Equity
Victory Munder Mid-Cap Core Growth - Y MGOYX

*Edited to add some funds my original copy & paste missed. :?

KeithZz
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by KeithZz » Thu Mar 16, 2017 9:58 pm

WageWork with my employer also decent. WageWork has Vanguard admiral share for 500 and small blend. Also LS Moderate and Conservative growth from Vanguard.

lsui
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by lsui » Fri Mar 17, 2017 1:35 am

I use HSA Bank to invest through TDAmeritrade, even though my employer uses HealthEquity and covers all fees. I found that if I leave 0 cash balance at HSABank, I am only charged $3 monthly investment fee, no $2.50 monthly maintainance fee.

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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by ThriftyInvestor » Sun Mar 26, 2017 3:48 am

lsui wrote:I use HSA Bank to invest through TDAmeritrade, even though my employer uses HealthEquity and covers all fees. I found that if I leave 0 cash balance at HSABank, I am only charged $3 monthly investment fee, no $2.50 monthly maintainance fee.


If you leave a zero cash balance at HSABank, how does HSABank obtain the $3 monthly investment fee from you?

I also use HSABank to invest through TDAmeritrade. I usually deposit my yearly maximum in four divided quarterly contributions, then leave ($3 + $2.50) x 3 months = $16.50 cash balance in my HSABank account and transfer the rest to TDAmeritrade. HSABank automatically deducts a $3 and $2.50 fee from my cash balance which zeros out just before I make the next quarterly contribution. Once I miscalculated and only had $3 and a few cents in my cash balance at HSABank, and they deducted $3 for the investment fee, but only the remaining few cents for that month's maintenance fee, and never asked me for the difference, or bothered to deduct the balance owed after I restored the cash balance to $16.50 the following quarter.

lsui
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Re: Optum Bank HSA using Admiral shares on Vanguard funds

Post by lsui » Mon Mar 27, 2017 1:26 am

ThriftyInvestor wrote:If you leave a zero cash balance at HSABank, how does HSABank obtain the $3 monthly investment fee from you?

Early each month, they debit the account for $3, so my balance becomes negative ($3), I then transfer $3 from TDA back to cash account, to bring the balance in cash account back to 0. If I leave any balance in the cash account, then they charge additional $2.50 (only up to the available balance in the account, never making the account balance negative, unlike the $3 investment fee). I believe the difference in how they charge the two fees is by design: $3 is for managing the investment account, $2.5 is for managing the cash account. And if the cash account is 0, then it does not need to be managed and no fee charged.

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