Question 1

Which HSA provider has lower fees, Health Equity or Fidelity?

Accepted Answer

Fidelity has a clear fee advantage. Fidelity charges $0 monthly maintenance fees for all accounts, with no hidden charges regardless of balance. Health Equity charges a custodial fee of 0.03% per month for investment administration, capped at $10 per month. This fee applies even if your funds are held in cash or a money market fund. For cash only accounts or balances under $25,000, Fidelity is significantly cheaper.

Question 2

Can I invest my HSA money with both Health Equity and Fidelity?

Accepted Answer

Yes, but the rules differ greatly. Fidelity offers full brokerage access with no minimum balance to start investing. You can buy ETFs, stocks, mutual funds, and bonds immediately. Health Equity requires you to meet an investment threshold. For individual accounts opened directly, you need $500 to invest. For employer sponsored groups, the threshold can vary from $0 to $2,500. Health Equity's self directed options are restricted to about 23 low cost Vanguard mutual funds.

Question 3

How do the interest rates compare for uninvested HSA cash?

Accepted Answer

Fidelity offers better interest on cash balances. Their cash sweep function earns up to 0.5% APY. Health Equity uses a tiered system: balances under $2,000 earn 0.10% APY, and the portion between $2,000 and $7,500 earns 0.20% APY. This means a $5,000 cash balance at Health Equity would earn very little interest, making Fidelity's flat rate more attractive for holding cash while deciding on investments.

Question 4

If my employer uses Health Equity, can I transfer funds to Fidelity?

Accepted Answer

Yes, you can perform a trustee to trustee transfer from your employer's Health Equity HSA to a Fidelity HSA. This process does not count toward your annual contribution limits. You initiate it through Fidelity, who will handle the transfer from Health Equity. You can also do a rollover once per 12 month period by taking a distribution and depositing it into Fidelity within 60 days. Check if your employer offers payroll deductions to Fidelity, as this is the simplest method.

Question 5

Are the tax benefits different between Health Equity and Fidelity HSAs?

Accepted Answer

No, the tax treatment is identical because both are HSAs governed by IRS Code Section 223. Contributions are pre tax or tax deductible, investment growth is tax free, and withdrawals for qualified medical expenses are tax free. Both require you to file Form 8889 with your taxes. The provider does not change your eligibility, contribution limits, or what counts as a qualified expense.

Question 6

What happens to my HSA if I leave my job?

Accepted Answer

Your HSA is your account, so it stays with you. If your HSA is with Health Equity through your employer, you can keep it there, though you may become responsible for any fees your employer was covering. A common strategy is to periodically transfer funds from your employer's HSA to a personal HSA at a provider like Fidelity to get better investment options and lower fees. There is no deadline to move the money after leaving a job.

Question 7

Which provider is better for long term HSA investing for retirement?

Accepted Answer

Fidelity is generally better for long term investing due to its unlimited investment choices and lack of fees. The ability to invest in a broad range of low cost index funds, ETFs, and other securities without a minimum balance allows for more aggressive growth strategies. Health Equity's limited fund menu and monthly custodial fee can eat into returns over decades. For treating your HSA as a long term retirement healthcare fund, Fidelity's platform offers more flexibility.

Question 8

Does Fidelity really have no monthly fees?

Accepted Answer

Yes, Fidelity charges $0 monthly maintenance fees for HSA accounts. There are no account service fees or hidden monthly charges. The only potential fee is an investment management fee of 0.35% annually, which applies only if you choose their guided portfolio service and your balance exceeds $25,000. For a self directed account, you pay nothing to hold cash or invest.

Question 9

What is Health Equity's 0.03% monthly fee?

Accepted Answer

Health Equity charges a 0.03% monthly custodial fee (0.36% annually) for investment administration. This fee is calculated daily based on your total account balance and applies even if your money is not invested and is sitting in cash. The fee is capped at $10 per month. For a $10,000 balance, this fee would be $3 per month or $36 per year.

Question 10

Are there closing or transfer fees?

Accepted Answer

Fidelity does not charge a fee to close an HSA or to transfer assets out. Health Equity may charge a closure fee and a transfer out fee; you need to check their current fee schedule. These fees are often around $25. To avoid them, you can sometimes do a rollover instead of a direct transfer, but you are limited to one rollover per 12 month period.

Question 11

Which provider is cheaper for a cash only HSA?

Accepted Answer

Fidelity is cheaper for a cash only HSA. With no monthly fees, you pay nothing to hold your balance. At Health Equity, the 0.03% monthly custodial fee still applies to cash balances, costing you money each month. For someone using their HSA as a simple savings account for near term medical expenses, Fidelity's structure preserves more of your money.

Question 12

Do employer contributions cover Health Equity's fees?

Accepted Answer

Sometimes. Many employers who offer Health Equity as a benefit negotiate a fee waiver or agree to pay the monthly custodial fees on behalf of their employees. This is a key question to ask your HR department. If your employer covers the fees, the cost comparison with Fidelity changes significantly while you are employed there.

Question 13

How do fees impact long term investment growth?

Accepted Answer

Even small fees have a large impact over decades. A 0.36% annual fee at Health Equity, compounded over 30 years, can reduce your ending portfolio balance by a significant percentage compared to Fidelity's zero fee structure. This is why fee minimization is a core principle of long term investing, especially in a tax advantaged account like an HSA where all growth is yours to keep.

Question 14

What is Health Equity's investment threshold?

Accepted Answer

For individuals opening an account directly with Health Equity, the investment threshold is $500 as of 2026. For accounts accessed through an employer group, the threshold can vary from $0 to $2,500, depending on what your employer negotiated. You must keep this minimum amount in your cash account before you can start investing in mutual funds.

Question 15

What can I invest in with Health Equity?

Accepted Answer

Health Equity offers a limited menu of about 23 low cost Vanguard mutual funds for self directed investing. These typically include target date funds, index funds for US total market, international stocks, and bonds. They also offer 'advisor managed' portfolios, which often require a $2,000 cash minimum and may have additional management fees.

Question 16

What can I invest in with Fidelity HSA?

Accepted Answer

A Fidelity HSA gives you full access to their brokerage platform. You can invest in thousands of mutual funds (including Fidelity's own zero fee index funds), ETFs, individual stocks, and bonds. There is no minimum balance to start investing, so you can buy a fractional share of an ETF as soon as you have funds in the account.

Question 17

Is there a fee for trading stocks or ETFs?

Accepted Answer

At Fidelity, there are no commissions for online trades of US stocks, ETFs, and most mutual funds. Health Equity does not offer trading of individual stocks or ETFs; your only choices are their pre selected mutual funds. There are no transaction fees for buying or selling those specific Vanguard funds within the Health Equity platform.

Question 18

Can I automatically invest my contributions?

Accepted Answer

Yes, both providers allow automatic investing. At Fidelity, you can set up automatic transfers from your HSA cash core to specific investments. Health Equity also allows automatic investing once you meet the threshold, often through a feature that sweeps funds above a certain cash level into your chosen investment portfolio. Automation is key for consistent investing.

Question 19

Which HSA has a better mobile app?

Accepted Answer

Fidelity's mobile app is generally rated higher for overall user experience, investment tracking, and transaction execution. Health Equity's app is functional for checking balances, submitting receipts, and using your debit card, but its investment interface is more basic. If you plan to actively manage investments, Fidelity's platform is more robust.

Question 20

How do I submit receipts for reimbursement?

Accepted Answer

Both providers offer online and mobile tools to upload pictures of receipts and track qualified expenses. Fidelity integrates this with their full financial dashboard. Health Equity's system is built specifically for HSA expense tracking. It is wise to save your own digital copies regardless of which provider you use, in case you need them for an IRS audit years later.

Question 21

What customer support options are available?

Accepted Answer

Fidelity offers 24/7 phone support and live chat. Health Equity also provides phone support during business hours and has online chat. For complex HSA tax questions, neither provider gives formal tax advice, but their support teams can explain their forms and reporting. Many users report shorter wait times and more investment knowledgeable reps at Fidelity.

Question 22

Can I use a debit card with both HSAs?

Accepted Answer

Yes, both Health Equity and Fidelity provide a dedicated HSA debit card for paying healthcare providers directly. You can also use the card at pharmacies for eligible items. It is important to only use the card for qualified medical expenses to avoid taxes and penalties. Both cards work like standard Visa or Mastercard debit cards where accepted.

Question 23

How are contributions reported to the IRS?

Accepted Answer

Both providers follow the same IRS rules. You will receive Form 5498 SA from either Health Equity or Fidelity each May, showing your total contributions for the prior tax year. They also send Form 1099 SA if you take any distributions. You use these forms to complete your Form 8889, which you file with your tax return. The process is identical regardless of provider.

health equity vs fidelity hsa: Your Questions Answered

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