How To Open an HSA Account
Opening an HSA account is easy. In this post you'll learn where to open an HSA, what information you need to get started and how to get money into your Health Savings Account.
Below is a list of steps to get your HSA started. And a few ways to get money invested in your new account.
Related Post: What is an HSA Account?
Where to Open Your HSA Account
There are two companies I recommend for opening your HSA: Fidelity Investments and Optum Bank.
The reason is they both offer:
I especially like that Optum Bank now has Betterment as an investment manager. Betterment is the largest robo-advisor and has the best investment technology out there.
I highly recommend Betterment for your other investment accounts too. Like a Roth IRA, Traditional IRA or joint account with your spouse.
You can't go wrong with either of these companies for opening your new Health Savings Account.
What Information You Need to Open an HSA
Like most investment accounts, there are a few pieces of information you need to open your Health Savings Account.
Remember to set a difficult password when you open your online account. I recommend you use a password manager like LastPass.
Information to Open an HSA Account
- 1Identifying information - Name, birthdate, Social Security Number (SSN)
- 2Contact Information - Mailing address, legal address, email address, phone number
- 3Employment Information (where applicable) - Employer name, employer address, occupation, health insurance information
- 4Beneficiary Information - Have the name, birthdate, address and contact info for the person(s) you want to receive your account if you were to pass away
With the above information it's a simple process to get your account opened. It should take less than 10 minutes.
Once you're finished it's time to put money into your HSA.
Here are 4 ways to do that.
Getting Money into Your HSA
A HSA account with no money is pointless. Right after you open your Health Savings Account, go ahead and get some money deposited. Even if it's a small amount to start.
Here are 4 ways to get money into your new Health Savings Account:
Send a Check
Though not the preferred way, sending a paper check is still an option when funding your HSA. Check with your account company for deposit instructions and address.
Many employers will allow you to set up an automatic payroll deduction each period to fund your HSA. Then the money is sent directly into your HSA auto-magically!
Like the payroll deduction, you can also set up an automatic draft from your bank account. Just make sure the timing is coordinated with your paycheck deposit.
Traditional IRA Transfer
The IRS allows you a one-time transfer of funds from your existing Traditional IRA. The funds must be in cash, so you'll have to sell enough investments to transfer.
The preferred way to fund your HSA is through an automation. That would mean either #2 or #3.
If you initially fund your HSA from an existing Traditional IRA, make sure to set up an automated contribution for later money. You'll thank yourself for doing it.
Automating your finances is one of the core principles of wealth building.
Summary of HSA Account Opening
HSA accounts are a great ways to lower your taxes, pay for medical expenses, and build wealth for your retirement.
Once you have the basic information, it should only take 10 minutes to open a new Health Savings Account. Right after you open your HSA, get some money deposited. Ideally you'll automate this through a payroll deduction or bank draft.
Then the next step is to get that money invested. That way it grows over time and provides a nice nest-egg to use for medical expense or retirement income.
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