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HSA Opened

January 11th, 2008 at 11:15 am

In November, I wrote about getting a new HDHP (High Deductible Health Plan):

[url]scfr.savingadvice.com/2007/11/02/new-health-insurance-p...

The next thing I needed to do was open a HSA (Health Savings Account). It was difficult choosing which institution to use for our HSA (none of our options seemed perfect), and 2007 tax year contributions don't have to be made until April 15th, so I put off making the decision.

However, it's time for DH to get his teeth cleaned, and of course we'd like to pay for the cleaning with tax-free money, so it was time for me to get on the ball and choose a HSA.

There's a fee when you open a HSA, and there is a fee when you close a HSA (no matter how long you've had it), so I wanted to choose the institution where I thought we'd be happy staying for a long, long time.

I narrowed my choices down to 3:
- Exante Bank
- HSA Bank (division of Webster Bank)
- HSA Resource Bank (division of Stearns Bank)

Exante Bank: I kept this as a top-3 choice because it was recommended by the health insurance company and I think I read that we would get reduced fees, etc with them because of the insurer we chose. But I ruled them out first. Their web site wasn't user friendly (no search feature, etc) and I couldn't find info on fees. Called customer service, and they said that fees varied so they did not publish them, but that the schedule of fees would be sent AFTER I opened my account ... um, not acceptable! Truth be told, I felt like I was dealing with an insurance company instead of a bank, and since they were recommended by the insurer I'm suspicious. I'd rather keep my HDHP and my HSA at arm's length from each other, with myself in the middle & in charge.

- HSA Bank (division of Webster Bank): Kiplinger's rated this one highest, mainly because of their high interest rates and low fees. I did find their rates to be a bit higher and their fees a bit lower than many others. I'm not familiar with Webster Bank: bankrate.com currently gives it a 3-star rating which is okay.

- HSA Resource Bank (division of Stearns Bank): I've been banking with Stearns Bank for awhile, and I adore them. Their customer service is hands-down the best I have ever experienced from any bank. It's very personal; when you call, you get a live human, and in fact you can speak with the same specific live person if you want to. I ask questions, and they never make me feel stupid or fail to answer clearly. Current bankrate.com rating is 5-star, and since I've been dealing with them it has stayed high. Unfortunately, their interest rate is a bit lower and their opening fee a tad higher than HSA Bank. And the worst part is that they charge a $25 annual fee (while HSA Bank charges none)!

On paper, maybe I should have gone with HSA Bank. But I decided to go with HSA Resource Bank in spite of the annual fee. Emotion played a role in the decision. It's reassuring knowing that if ***KNOCK ON WOOD*** DH or I suffered a medical crisis or long-term illness, our HSA is with a solid insitution that we can rely on for excellent, highly personalized customer service.

I did my app on-line, printed it out, and mailed it off with our initial contribution this morning. Then I scratched "Set Up & Fund HSA" off on my calendar where I keep a list of things to do called "Important This Month." Ahhh.

7 Responses to “HSA Opened”

  1. MarianneJ Says:

    Good job setting this up. I think you made the right choice. I think of it like this - $25/year is a bargain to pay for someone to answer the phone helpfully and courteously whenever you have a question or problem with your account. I wish HSAs were available in NJ. Frown

  2. Ima saver Says:

    I think you made a wise choice also!

  3. Jon Says:

    You can get an HSA in NJ too...only difference is you lose the state tax exemption - but you still get the federal tax savings.

  4. Jon Says:

    You can get an HSA in NJ too...only difference is you lose the state tax exemption - but you still get the federal tax savings. Also, chase seems to be more competitive than HSA Bank - higher rates and lower fees form the start. and at least I've heard of Chase before. good luck.

  5. Broken Arrow Says:

    What the?! It costs you to open and close a HSA?

    Hmm.... In that case, I consider myself very fortunate. The only requirement my credit union has is a minimum balance of $1. At least... I think so. Now you got me wondering. I'm going to go check that because, if there are fees involved, that would change things. I hate fees!

  6. scfr Says:

    MariRDH - HSAs were nationally mandated, so I believe you can get one in any state, including NJ. You do need to have a HDHP in order to qualify for a HSA. If you have a HDHP or can get one, it might be worth looking in to a bit more.

    BA - If your credit union only requires a $1 minimum and has no fees, you are indeed fortunate! I didn't look at CUs for our HSA and perhaps that was my bad. I've never had an account at a CU ... I've looked in to it but always found their rates to be lower than what I could earn elsewhere, so have gotten out of the habit of checking with them. I agree with you about hating fees ... In fact, in the past I have said "I refuse to pay fees of any kind" but the HSA was a different situation due to the tax savings.

  7. Michael Schutsky Says:

    Two River Community Bank, Middletown, NJ has no fees for HSA. www.tworiverbank.com

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