#9 You can choose your own HSA provider.
So now that you have been convinced that it’s time to open up an HSA, where do you start?
First, if you have an HDHP, there’s no doubt your insurance company and/or your employer have tried to “suggest” to you where you should be putting your money. In fact, many insurance companies and/or employers will make it seem like you have to use the provider they suggest. This is absolutely not the case. If you don’t use the provider sponsored by your employer, you likely will not be able to contribute tax-free through payroll deductions. However, you can still contribute on your own and take the deduction on your tax return at the end of the year, thereby getting the exact same benefit.
There is normally a much larger benefit to choosing your own HSA provider. Most providers “suggested” by insurance companies and employers have setup fees, monthly fees, and many other costs associated with those accounts, and they pay little to no interest. This is a rip-off. Plenty of providers out there don’t have monthly fees and pay good interest and even have investment options for those saving for the long-term. It pays to do your research and open your own account. One excellent resource for finding providers with no fees and reasonable interest rates is www.depositaccounts.com.
If your employer makes contributions to your HSA, they may require that you open an account with the institution they suggest. However, keep in mind that nothing is stopping you from having two or more HSA accounts, and you can make tax-free trustee-to-trustee transfers between HSA accounts but will have to have the receiving institution initiate those kinds of transfers for you.
Also, make sure the provider you choose offers a debit card associated with the account for free as that is extremely useful for paying medical expenses.