For many years, I’ve had a high-deductible health plan (HDHP). This is a health insurance plan that, as the name would suggest, comes with a higher deductible. It saves me premium payments but leaves me on the hook for more of the medical bills. Since I’m a light user of health insurance, this is a trade-off I’m happy to make.
The main reason I opt for an HDHP, however, isn’t for the lower premium payments. It’s because it gives me access to a great tax-advantaged savings option in the form of a Health Savings Account (otherwise known as an HSA).
HSAs are great because of the special tax benefits that they offer. They’re one of the only forms of triple-tax-advantaged savings available, where you can save money pre-tax, allow it to grow tax-free, and withdraw it tax-free. Whether it makes sense for you to get an HDHP so you can have an HSA will depend on your specific circumstances. But if you’re in a position where an HDHP makes sense, taking advantage of an HSA is something you should definitely do.
There are a lot of HSA providers out there. Over the past several years, I’ve used an HSA provider called Lively. It worked out well for me because it had a great mobile and online interface, and it made it easy to track my yearly contributions and my HSA-eligible expenses. The investment options available with Lively were strong too, although the investing was done via TD Ameritrade, so on the investment side, it wasn’t quite so pretty or intuitive. Still, Lively got the job done. And importantly, it charged no fees and didn’t require keeping a minimum cash balance (so I could invest everything I was saving in my HSA).
Unfortunately, as seems to be the case with a lot of these fintech companies, things changed and new fees were introduced. I’m against paying fees when I don’t need to, so once these new fees went into effect, I started looking for a new HSA. After doing a bit of research on which HSA to use, I ended up settling on the Fidelity HSA.
Why I Switched Over To A Fidelity HSA
To begin, let’s start with what happened with Lively that made me look into switching to a different HSA. Back in 2019, Charles Schwab bought TD Ameritrade and this year, they finally began the process of merging TD Ameritrade accounts with Charles Schwab accounts. Lively had been using TD Ameritrade as their investment platform, so with Charles Schwab merging TD Ameritrade accounts, it meant that all Lively accounts were switching over to Charles Schwab investments.
Unfortunately, the switch to Charles Schwab seems to have changed the pricing structure and minimum cash balance requirements at Lively. Previously, I didn’t need to have any minimum cash balance and there were no fees to invest my HSA funds. The new pricing structure now requires keeping $3,000 in cash to keep your account fee-free or else you have to pay a $24 per year administrative fee.
$24 per year in administrative fees isn’t a deal-breaker by itself, but on principle, I can’t justify paying that fee or keeping $3,000 in cash when there are good free HSA options as well.
Fidelity hit the mark with what I needed. And since I already use Fidelity for my Solo 401k, using Fidelity for my HSA makes things a bit simpler for me by keeping more of my investment accounts in one spot.
The Benefits Of The Fidelity HSA
Here’s a rundown of why the Fidelity HSA made sense to me after looking at my different HSA options.
1. No Fees and No Minimum Cash Balance
The most important reason I opted for the Fidelity HSA is that it charges no fees and has no minimum cash balance requirement. The $24 per year in fees that Lively would have charged me isn’t a huge deal, but it’s still something that I’d rather not pay if I can.
The bigger deal is if your HSA provider requires you to keep a minimum cash balance, as many HSAs require customers to keep a minimum cash balance in their account, with any funds above that free to invest. If, like me, you’re using your HSA as an additional tax-advantaged investment account, then this cash drag will cost you quite a bit over the long term since that money isn’t being put to work in the market. Fidelity doesn’t require any minimum cash balance, so I can put all of my HSA funds to work in the market.
2. I Can Invest In The Fidelity ZERO Total Market Index Fund (FZROX)
One interesting thing about Fidelity is that they offer several index funds with a 0% expense ratio. This is pretty remarkable, as there is no other company that currently offers index funds with a 0% expense ratio. Not even Vanguard can match this.
The best Fidelity zero-fee index fund is probably the Fidelity ZERO Total Market Index Fund (FZROX). This is an index fund that aims to match the total stock market and is very similar to other Total Stock Market Index Funds, such as Vanguard’s Total Stock Market Index Fund. As Fidelity states on their website, FZROX seeks “to provide investment results that correspond to the total return of a broad range of publicly traded companies in the US.” In other words, if you want to match the market, FZROX is a great option.
There are a handful of total stock market index funds that I’m comfortable investing in. Vanguard’s Total Stock Market Index Fund (VTSAX) is generally the one I think is best, but Fidelity’s Total Stock Market Index Fund (FSKAX) and their ZERO Total Market Index Fund are on the same level in my view. I’m very comfortable investing in FZROX for the long term.
3. I Already Have A Fidelity Solo 401k.
Finally, switching over to the Fidelity HSA made a lot of sense because I already have other retirement accounts with Fidelity, specifically my Solo 401k.
I’ve talked about why the Fidelity Solo 401k is my preferred Solo 401k provider in previous posts, so switching my HSA over to Fidelity was a natural step. In fact, it simplifies my accounts a bit more, since I now have two of my tax-advantaged accounts with Fidelity (I have my Roth IRA with Vanguard, however).
The (Very) Minor Downsides With The Fidelity HSA
In the interest of completeness, I thought it would be worth briefly mentioning a few of the (very) minor downsides of the Fidelity HSA. None of these should be deal breakers, but they’re worth a quick mention.
To start, Fidelity’s HSA is definitely not as nice looking as Lively. One of the things that first attracted me to Lively was how intuitive and easy to use it was. Fidelity’s interface is fine, but Lively has them beat there.
It’s also worth knowing that while FZROX is an excellent fund, it isn’t a portable fund. That means you can’t move your FZROX investment in-kind to another brokerage. If you were to switch to a different brokerage, you would first have to liquidate the fund and then transfer the money in cash to your new brokerage. In an HSA, this isn’t anything to worry about since HSAs are tax-advantaged accounts, so liquidating your investments wouldn’t create a taxable event. You’d only really have to worry about this if you were investing in FZROX in a taxable account.
Again, none of these downsides really matter, but I thought it was worth briefly mentioning here.
The Process Of Switching From Lively To The Fidelity HSA
Switching over to the Fidelity HSA was a simple process. When you open your Fidelity HSA, you’re asked if you have funds in another HSA that you’d like to move to Fidelity. If you answer yes, you’ll fill out some information about your previous HSA and Fidelity will generate a form for you that it sends to your current HSA provider so that they can transfer your funds to Fidelity.
When I opened my account, I filled out this information and Fidelity immediately sent a form to Lively without me having to do anything. Within a day, Lively received my information and sent me a secure message with a few questions to confirm the transfer. I indicated that I wanted to keep my Lively account open in case any trailing dividends were later posted to my account.
They also asked me if I wanted to transfer my investments in-kind or liquidate them into cash and then transfer the cash to Fidelity. I opted to liquidate my investments since my plan is to invest all of my HSA funds into FZROX. Since it’s an HSA, liquidating my investments doesn’t create a taxable event.
Overall, I was surprised at how easy it was to transfer my funds to my Fidelity HSA. With other brokerage accounts, transferring funds has always been a huge pain, requiring me to manually fill out multiple forms and talk to customer service people. The fact that I could do everything online with Fidelity and didn’t have to call anyone was amazing.
Final Thoughts
Lively isn’t a bad HSA, but I think at this point, Fidelity is the better option when it comes to HSAs. Indeed, for most investment accounts, Fidelity is up there as one of the best. They’re already my favorite Solo 401k provider. Now they’re my favorite HSA provider too.
If you’re using Lively and are in the same position as me, Fidelity is what I’d recommend for your HSA. Their interface is solid. It’s free with no minimum balance requirement. And you get great investment options, especially with their zero-fee index funds.
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More Recommended Ebike/Scooters
Check out these other ebikes and scooters I've reviewed:
- Urban Arrow Ebike – Last year, I made one of the largest purchases I’ve ever made – I bought a $9,000 electric cargo bike from Urban Arrow. In my Urban Arrow review, I will discuss what it is and why I decided to buy this bike, as well as discuss how impactful a bike like this can be on your journey to financial independence.
- Troxus Explorer Step-Thru Ebike – The Troxus Explorer Step-Thru is a fat-tire ebike that I’ve had the pleasure of riding for a while now. It has amazing power, great looks, and awesome range. If you’re looking for a great fat-tire ebike that offers a lot for the price, the Troxus Explorer Step-Thru is definitely one for you to consider. Check out my Troxus Explorer Step-Thru Review.
- Hovsco HovBeta Ebike – The HovBeta is a folding ebike with great specs and a lot of interesting features, and importantly, it’s sold at a good price point. I’ve had a blast commuting with it and using it to do deliveries with DoorDash, Uber Eats, and Grubhub. Check out my Hovsco HovBeta Ebike Review.
- Vanpowers Manidae Ebike – The Vanpowers Manidae is a fat tire ebike that I’ve been riding as my primary winter commuting bike and have also been using it to do food delivery with apps like DoorDash, Uber Eats, and Grubhub. After clocking in a decent number of miles with this ebike, I wanted to write a post sharing what my experience with the Vanpowers Manidae ebike has been like. Check out my Vanpowers Manidae Review.
- Sohamo S3 Step-Thru Folding EBike Review – A Great Value Folding Ebike – The Sohamo S3 Step-Thru Folding Ebike is an entry-level folding ebike that offers a lot of value for the price point. I’ve been riding the Sohamo S3 for a while now, putting the bike through its paces, and I have to say, this bike has exceeded all of my expectations. Check out my Sohamo Review.
- KBO Flip Ebike – The KBO Flip is an excellent bike. I’ve had a great time riding it and think it’s a versatile bike that can be used for a lot of purposes and can fit a variety of lifestyles. It’s worked out great for me as a general commuter bike and as a food delivery bike. Check out my KBO Flip Review.
- Hiboy P7 Commuter Ebike – The Hiboy P7 is an excellent electric commuter bike that’s offered at an affordable price point. The range and speed of this bike are both very good, so you won’t have any trouble getting anywhere you need to go with it. As a food delivery vehicle, this is also good – with how much range it offers, you’ll be able to work all day on a single charge. Check out my Hiboy P7 Commuter Electric Bike Review.
- Himiway Escape Ebike – The Himiway Escape is an interesting bike for anyone looking for a moped-style ebike. If you’re a gig economy worker, the Himiway Escape is particularly interesting and it’s possible to think of it as an investment, especially if you can opt to do deliveries with the Himiway versus using a car. It’s not cheap, but you can definitely make your money back when you compare the mileage you’ll put on your car versus using an ebike. Check out my Himiway Escape Bike Review.
- Espin Sport Ebike – The Espin Sport is a good ebike for someone who is looking for an ebike that feels and rides more like a regular bike. There are many ebikes that are really only bikes in name. In reality, they’re basically electric mopeds. The Espin Sport, by contrast, is a bike you could probably ride without the battery and you’d feel like you’re just riding a regular bike. Check out my Espin Sport Review.
- Varla Eagle One Scooter – The Varla Eagle One is an excellent scooter that can make sense for a lot of people. It can work as a primary mode of transportation. You can use it to work on gig economy apps like DoorDash, Uber Eats, and Grubhub. And it can also be a recreational vehicle if you’d prefer to use it for that. Check out my Varla Eagle One Review.
- Varla Falcon Scooter – The Varla Falcon is an excellent scooter that offers a good amount of power at a lower price point compared to more powerful scooters. It’s not exactly an entry-level scooter, nor is it a high-powered scooter. I think it fits somewhere in-between those two categories – an intermediate scooter if I had to give it a category. Check out my Varla Falcon Review.
- Hiboy S2 Scooter – The Hiboy S2 is an excellent entry-level commuter scooter that's perfect for someone looking to save some money in transportation costs and improve their commute. Check out my Hiboy S2 Review.
- Hiboy S2R Scooter – The Hiboy S2R is one of the more interesting electric scooters I’ve been able to test out. It’s not a high-powered scooter, but for an everyday transport option, it’s very useful, especially given some of the unique features that it has. Indeed, for the price, the Hiboy S2R might be the best value scooter I’ve used. Check out my Hiboy S2R Review.
- Fucare H3 Scooter – The Fucare H3 is a fun scooter and I’ve enjoyed testing it out. For a daily commuter or quick trips or errands, the Fucare H3 is probably the scooter I’ll use. It’s portable and easy to maneuver, so it’s just easier to take on the road when I need it. Check out my Fucare H3 Scooter Review.
More Recommended Investing App Bonuses
For additional investing app bonuses, be sure to check out the ones below:
- M1 Finance ($100) – This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account. Check out my M1 Finance Referral Bonus – Step-By-Step Guide.
- SoFi Invest ($25) – SoFi Invest is an easy brokerage account bonus that you can earn with just a few minutes of work. Use my SoFi Invest referral link, fund your SoFi Invest brokerage account with just $10 and you’ll get $25 of free stock. I also have a step-by-step guide for the SoFi Invest referral bonus.
- Webull (20 free stock shares) – Webull's current promotion gives you 20 free shares valued between $3-$3,000 each if you open an account using my referral link. Here’s a guide I wrote about how to earn your free shares using Webull.
- Moomoo (15 free stocks) – Moomoo is a free investing app currently offering 2 different referral bonuses if you open an account using a referral link. Read my Moomoo referral bonus guide for more information.
- Robinhood (1 free stock) – Robinhood gives you a free stock valued between $2.50-$225 if you open an account using my referral link.
- Public (1 free stock) - Public gives you a free stock valued between $3-$70 if you open an account using my referral link.
More Recommended Bank Account Bonuses
If you’re looking for more easy bank bonuses, check out the below options. These bonuses are all easy to earn and have no fees or minimum balance requirements to worry about.
- Upgrade ($200) – Upgrade is a free checking account that’s currently offering a $200 referral bonus if you open an account and complete a direct deposit. These bonus terms are easy to meet, so it’s well worth doing this bonus as soon as you can. Here’s a post I wrote with more details: Upgrade $200 Referral Bonus – Step By Step Directions.
- Ally Bank ($100) – Of all the banks out there, Ally is, without a doubt, my favorite. At the moment, Ally is offering $100 to customers who open an eligible Ally account and meet the requirements. Here are the step-by-step directions to earn your Ally Bank referral bonus.
- Fairwinds Credit Union ($175) – Fairwinds Credit Union is offering a referral bonus for users that sign up using a referral link. Fairwinds has no fees or minimum balance, so this is a particularly easy bonus to earn. Since this is a smaller credit union, my gut instinct tells me this offer won’t be around long, so if you’re in a position to meet the bonus requirements, grab this bonus before it’s gone. Here is my step-by-step guide on how to earn your Fairwinds Credit Union bonus.
- Chime ($100) - Chime is a free bank account that offers a referral bonus if you use a referral link and complete a direct deposit of $200 or more. In practice, any ACH transfer into this account triggers the bonus. This bonus is easy to earn and posts instantly, so you’ll know if you met the requirements as soon as you move money into the account. I wrote a step-by-step guide on how to earn your Chime referral bonus that I recommend you check out.
- US Bank Business ($900) – This is a fairly easy bank bonus to earn, since there are no direct deposit requirements. In addition, you can open the Silver Business Checking account, which comes with no monthly fees. Check out how to earn this big bonus here.
- GO2Bank ($50) - GO2Bank is an easy bank bonus that I recommend people take advantage of if they have an easy way of meeting the direct deposit requirement. I like that it’s easy to open the account and that the bonus pays out quickly. Check out my step-by-step guide on how to earn your GO2Bank $50 referral bonus.
- Current ($50) – Current is a free fintech bank that’s offering new users a $50 referral bonus after signing up for an account using a referral link. Current is an easy bonus to earn and also gives you access to three savings accounts that pay you 4% interest on up to $2,000. That means you can put away up to $6,000 earning 4% interest. That’s very good and makes Current an account I recommend to everyone. Check out my step-by-step guide on how to earn your Current Bank bonus.
- Novo Bank ($40) - Novo bank is a free business checking account that’s currently offering a $40 bonus if you open a Novo business checking account using a referral link. In addition to being a good bank bonus, Novo is also a good business checking account. It has no monthly fees or minimum balance requirements and operates a good app and website. Indeed, it’s the business checking account I currently use for this blog. Check out my post on how to easily open a Novo account.
- Varo ($25) – Varo is a free fintech banking app similar to Chime or Current. It’s currently offering a $25 bonus to new users that open a new Varo account with a referral link. The bonus for this bank is very easy to meet, all you need to do is spend $20 within 30 days of opening your Varo account. Check out my step-by-step guide to learn how to earn this bonus.
Kevin is an attorney and the blogger behind Financial Panther, a blog about personal finance, travel hacking, and side hustling using the gig economy. He paid off $87,000 worth of student loans in just 2.5 years by choosing not to live like a big shot lawyer.
Kevin is passionate about earning money using the gig economy and you can see all the ways he makes extra income every month in his side hustle reports.
Kevin is also big on using the latest fintech apps to improve his finances. Some of Kevin's favorite fintech apps include:
- SoFi Money. A really good checking account with absolutely no fees. You'll get a $25 referral bonus if you open a SoFi Money account with a referral link, and an additional $300 if you complete a direct deposit.
- 5% Savings Accounts. I'm currently getting 5.24% interest on my savings through a company called Raisin. Opening a Raisin account takes minutes to complete, it's free, and all of your funds are FDIC-insured. I explain how it works, why I'm now using it to store my emergency fund and any other cash savings I have, and why I recommend everyone check it out in this review.
- US Bank Business. US Bank is currently offering new business customers a $900 signup bonus after opening a new account and meeting certain requirements.
- M1 Finance. This is a great robo-advisor that has no fees and allows you to create a customized portfolio based on your risk tolerance. You also get $100 for opening an account.
- Empower. One of best free apps you can use to monitor your portfolio and track your net worth. This is one of the apps I use to track my financial accounts.
Feel free to send Kevin a message here.
There are a few wrong information in the article (as of 02/2024 anyway) about the Lively $24 annual fee. 1) That fee is only if you do investment AND your brokerage balance (NOT CASH) is below $3000. 2) There is no minimum amount fee for the cash account of Lively either. These are pretty obvious info so I’m perplex at why you thought otherwise.
Hey TT, I’m not sure if you didn’t read the article or perhaps my writing wasn’t clear. Here’s what I wrote:
“Previously, I didn’t need to have any minimum cash balance and there were no fees to invest my HSA funds. The new pricing structure now requires keeping $3,000 in cash to keep your account fee-free or else you have to pay a $24 per year administrative fee.”
Here’s what it says direct from Lively’s website:
Lively offers two ways to invest with our Schwab Health Savings Brokerage Account option: invest anything above $3,000 for no access fee or invest with no minimum requirements after a $24 annual access fee.
The key words there are invest anything ABOVE $3,000 for no access fee. That means you must keep $3k not invested (I.e. In cash) to avoid the fee. It’s not about your brokerage balance. Hence that key word “above.”
Not to be rude, but I’m going to throw the same shade back at you and say I’m a bit perplexed you didn’t understand how the fee works.
Again not a deal breaker by any means, but just annoying to have that $3k cash drag when I wouldn’t need that otherwise.
Edit: Follow up. Perhaps we have some confusion about what we’re talking about. Lively itself has no fees. They just charge a $24 per year fee for the investing account if you don’t keep a cash balance of $3k. How myself and most others in the Financial Independence community use the HSA is as an additional tax-advantaged investment account, so the idea is that we don’t want to keep any money in cash in our HSA and instead have it all invested. Here’s a post I wrote sometime ago that explains how folks like me use the HSA: https://financialpanther.com/hsa-perfect-retirement-account-millennials/
Thank you for this article. I have the Lively HSA for me and my husband. I’m interested in switching to Fidelity after reading this but have one question. How does Fidelity handle receipts for expenses you incur but want to save for future reimbursement? Also, how easy is it to transfer this data from Lively to Fidelity?
You’ll need to manually track expenses. I keep a Google spreadsheet that tracks my HSA eligible transactions. Lively was nice because you could input that information directly on their website. Not a huge deal to have to track it on your own spreadsheet though – I was already doing both anyway.