Fidelity HSA vs Lively HSA
The verdict
Choosing between Fidelity and Lively as your HSA custodian depends on your investing style and preference for platform integration. Fidelity is the superior choice for experienced investors who already use its ecosystem and want maximum investment flexibility from a single login.
Choosing the right HSA custodian is a decision that affects your tax savings, investment growth, and healthcare spending flexibility for decades. The wrong provider can lock your money in a low-yield account with high fees, while the right one turns your HSA into a powerful retirement and healthcare tool. As of 2026, new rules expand eligibility, making your choice of an HSA custodian more important than ever. This guide breaks down the key features of two leading providers, Fidelity and Lively, to help you select the best partner for your financial goals.
Fidelity HSA
Fidelity Investments is a giant in the brokerage world, and its HSA offering reflects that scale. It provides a fully integrated investment platform with $0 account fees, no minimums to invest, and access to a vast selection of mutual funds, ETFs, and even managed portfolios for balances over
Lively HSA
Lively is a fintech company built specifically for HSAs. It partners with TD Ameritrade for investments. The platform is known for its simple, user-friendly interface, $0 monthly fees, and $0 investing fees with no account minimums.
| Feature | Fidelity HSA | Lively HSA |
|---|---|---|
| Account Fee (2026) | $0Tie | $0Tie |
| Investment Fee | 0.35% AUM for managed portfolios (>$25k); $0 for self-directed | $0Winner |
| Minimum to Start Investing | $0Tie | $0Tie |
| Investment Options & Platform | Fidelity's full brokerage platformWinner | TD Ameritrade brokerage platform |
| Ease of Use & Interface | Powerful but can be complex | Designed for simplicityWinner |
| Trustee-to-Trustee Transfer Process | Online form, may charge incoming fee | Online form, no fee from LivelyWinner |
| Integration with Employer Payroll | Commonly acceptedTie | Commonly acceptedTie |
| Customer Support Specialization | General brokerage support | HSA-focused supportWinner |
| Mobile App Experience | Full-featured Fidelity appWinner | Dedicated Lively app |
| Ideal User Profile | Active investor, Fidelity customerTie | HSA beginner, fee-conscious saverTie |
Our Verdict
Choosing between Fidelity and Lively as your HSA custodian depends on your investing style and preference for platform integration. Fidelity is the superior choice for experienced investors who already use its ecosystem and want maximum investment flexibility from a single login.
Best for: Fidelity HSA
- Active investors who trade stocks and ETFs regularly.
- Existing Fidelity customers who want consolidated account management.
- Those with large HSA balances interested in managed portfolio options.
- Users who demand a top-tier, full-featured mobile trading app.
Best for: Lively HSA
- First-time HSA users who value a simple, guided experience.
- Fee-conscious savers who want guaranteed $0 investment fees.
- Families focused on easy expense tracking and receipt uploads.
- Individuals who prioritize customer support specialized in HSA rules.
Pro Tips
- If your employer's HSA custodian charges high monthly fees, set up an automatic quarterly trustee-to-trustee transfer to your preferred low-cost provider. This keeps most of your funds invested optimally while still capturing payroll tax savings.
- Treat your HSA as a retirement account first. Pay for current medical expenses out-of-pocket if possible, save your receipts, and let the HSA balance grow tax-free. Reimburse yourself decades later.
- The 2026 rule change making some bronze and catastrophic Exchange plans HSA-eligible is a big deal. If you buy insurance on your own, re-evaluate your plan; you might now qualify for an HSA with a lower premium.
- Always name a beneficiary for your HSA. Unlike a 401(k), HSAs do not always default to your spouse. Without a designation, the account may go through probate.
- Use your HSA debit card only for qualified medical expenses. Paying with a rewards credit card and then reimbursing yourself from the HSA gives you the tax advantage plus the credit card points.
Frequently Asked Questions
What exactly does an HSA custodian do?
An HSA custodian is an IRS-approved financial institution, like a bank or brokerage, that holds your HSA assets. Its core duties include securely processing your contributions and qualified withdrawals, tracking your annual limits to prevent excess contributions, providing tax forms, and often offering investment options. The custodian ensures your account complies with IRS rules. You cannot open an HSA without one.
Can I have more than one HSA custodian?
Yes, you can have multiple HSA accounts with different custodians. However, your total contributions across all HSAs must stay within the annual limit. For 2026, that's $4,400 for self-only HDHP coverage or $8,750 for family coverage, plus a $1,000 catch-up if you're 55 or older. Exceeding this triggers a 6% excise tax. Having multiple accounts can complicate tracking, so many people consolidate via a trustee-to-trustee transfer.
What happens if my employer's chosen HSA custodian has high fees?
You are not locked into your employer's HSA custodian. While you must use their designated account for any payroll contributions to receive FICA tax savings, you can perform a trustee-to-trustee transfer to move funds to a lower-fee HSA custodian of your choice. This transfer does not count toward your annual contribution limit and avoids tax penalties. You can do this periodically to consolidate funds and access better investment options.
Are my HSA funds safe if the custodian fails?
HSA funds held at a bank or credit union custodian are typically FDIC-insured up to $250,000 per depositor. If your HSA custodian is a brokerage, your cash sweep account may have FDIC insurance, and securities in the investment account are protected by SIPC up to $500,000. It is important to verify the specific insurance details with your chosen HSA custodian. The assets in the account are legally yours, not the custodian's, so in a failure, they would be transferred to another institution.
How do I move my HSA to a new custodian without penalties?
To avoid taxes and penalties, you must initiate a direct trustee-to-trustee transfer. Contact your new HSA custodian and fill out their transfer form. They will request the funds directly from your old custodian. Do not take a distribution yourself and redeposit it, as that counts as a withdrawal and could be taxable. There is no limit on the number of transfers, but some custodians charge a fee, often around $25.
Can I invest my HSA funds with any custodian?
Not all HSA custodians offer investment options. Some only offer a basic savings account. Providers like Fidelity and Lively allow you to invest with $0 minimums, while others, like HealthEquity, require a $500 minimum balance before trading. When choosing an HSA custodian, check their investment menu, fees, and minimums if you plan to grow your balance for future medical or retirement expenses.
What's the difference between an HSA custodian and an HSA administrator?
The terms are often used interchangeably, but technically, the custodian is the financial institution that holds the assets. An administrator may handle the record-keeping, customer service, and compliance tasks for the custodian. For example, Lively acts as an administrator that partners with a custodian bank. For you, the key is to understand who charges the fees, provides the statements, and manages the investment platform.
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