Fidelity Health Savings Account (HSA)

When I first learned about Health Savings Accounts (HSAs), I was intrigued by their potential to transform how I manage healthcare costs. If you’re exploring ways to save for medical expenses while enjoying tax benefits, a Fidelity HSA might be the perfect fit for you.

In this article, I’ll walk you through everything you need to know about Fidelity’s HSA, from its features and benefits to how you can make the most of it.

What to Know About Fidelity 401k

What Is a Fidelity HSA?

A Fidelity Health Savings Account is a tax-advantaged account designed to help you save for qualified medical expenses when enrolled in a high-deductible health plan (HDHP). I like to think of it as a financial Swiss Army knife for healthcare, it’s versatile, portable, and packed with benefits.

You can use it to pay for current medical costs or invest for future expenses, all while enjoying significant tax advantages.

Fidelity, a trusted name in financial services, offers a robust HSA platform with no account fees or minimums, making it accessible whether you’re just starting out or managing a substantial balance.

According to Morningstar, Fidelity has been rated the top HSA provider for both spending and investing for six consecutive years (2019–2024), which gives me confidence in their expertise.

Key Features of Fidelity HSA

Triple Tax Advantage: Your contributions are tax-deductible (or pre-tax through payroll), earnings grow tax-free, and withdrawals for qualified medical expenses are tax-free.
No “Use It or Lose It” Rule: Unlike a Flexible Spending Account (FSA), your HSA funds roll over year to year, staying with you even if you change jobs or retire.
Investment Options: You can invest your HSA funds in mutual funds, ETFs, or stocks, with no minimum investment threshold.
No Account Fees: Fidelity charges zero account fees for individual HSAs opened through Fidelity.com, though employer-sponsored HSAs may have a recordkeeping fee (up to $48/year, often waived based on balance).
Convenient Access: Pay for expenses using a debit card, Fidelity BillPay, or electronic funds transfer (EFT).

Health Savings Account vs. Flexible Spending Account

Why I Chose a Fidelity HSA

When I decided to open an RSA, I compared several providers, but Fidelity stood out for its flexibility and cost-effectiveness. If you’re like me, you want an account that’s easy to manage and doesn’t nickel-and-dime you with fees.

Fidelity’s HSA offers $0 commissions on U.S. stock and ETF trades, which is a game-changer if you’re investing your funds. Plus, their user-friendly platform and mobile app make it simple to track expenses, contribute, or adjust investments on the go.

Another reason I appreciate Fidelity is their educational resources. Their Health Savings Account Calculator helped me estimate how much to save based on my healthcare needs, and their articles on retirement planning showed me how an HSA can double as a long-term savings tool.

If you’re unsure where to start, you can answer four quick questions on their website to confirm your eligibility.

How Does a Fidelity HSA Work?

Let me break it down for you. To open a Fidelity HSA, you need to be enrolled in an HSA-eligible HDHP, which typically has lower premiums but higher deductibles than traditional health plans. Once enrolled, you can contribute to your HSA in several ways:

Pre-Tax Payroll Deductions: If your employer offers a Fidelity HSA, you can contribute directly from your paycheck, reducing your taxable income.
After-Tax Contributions: You can contribute post-tax money and claim a tax deduction when filing your taxes.
One-Time IRA Transfer: You can make a once-in-a-lifetime transfer from an IRA to your HSA (up to the annual contribution limit) without penalties or taxes.
HSA Transfers: Consolidate existing HSAs into your Fidelity account for streamlined management.

For 2025, the IRS sets contribution limits at $4,300 for individual coverage and $8,550 for family coverage, with an additional $1,000 catch-up contribution if you’re 55 or older. Your employer’s contributions count toward these limits, so keep that in mind when planning.

Spending and Investing Your HSA

You have multiple options for using your HSA funds:

Pay Directly: Use the Fidelity HSA debit card, BillPay, or EFT to cover qualified medical expenses like copays, prescriptions, or dental care.
Reimburse Yourself: Pay out-of-pocket and reimburse yourself later, as long as the expense was incurred after opening your HSA.
Invest for Growth: Once you have enough cash for near-term expenses (Fidelity suggests keeping your annual deductible in cash), you can invest the rest. Choose between self-directed investing or Fidelity Go®, a managed option with a $10 minimum balance.

I love that after age 65, you can withdraw HSA funds for non-medical expenses without a penalty (though you’ll owe income tax).

This flexibility makes the HSA a powerful retirement tool, especially since Fidelity estimates a 65-year-old may need $165,000 for healthcare costs in retirement.

Is a Health Savings Account Worth It?

Benefits of a Fidelity HSA

Here’s why I think you’ll find a Fidelity HSA appealing:

Cost Savings: No account fees or minimums mean more of your money stays in your pocket. The $0 commission on stock and ETF trades is a bonus for investors.
Tax Efficiency: The triple tax advantage is hard to beat. I’ve saved significantly on taxes by contributing pre-tax dollars through my employer.
Investment Flexibility: Whether you’re a hands-on investor or prefer a managed approach like Fidelity Go, you have options to grow your savings.
Portability: Your HSA belongs to you, not your employer. If you switch jobs, your funds come with you.
Security: Your account is protected by the Securities Investor Protection Corporation (SIPC) up to $500,000, including $250,000 for uninvested cash, with additional coverage beyond these limits.

How to Get Started with Your Fidelity HSA

Ready to open your Fidelity HSA? Here’s what I did, and what you can do too:

Confirm Eligibility: Ensure you’re enrolled in an HDHP and not covered by another non-HSA-eligible plan (like Medicare). Use Fidelity’s eligibility quiz if you’re unsure.
Open an Account: Visit Fidelity.com or use the Fidelity Health® App. If your employer offers a Fidelity HSA, sign in through NetBenefits®.
Fund Your HSA: Set up contributions via payroll, bank transfer, or check. I set up recurring deposits to stay consistent.
Choose Investments: Decide how much to keep in cash (I aim for my deductible amount) and invest the rest based on your goals and risk tolerance.
Manage Your Account: Use the Fidelity Health App to pay bills, track expenses, or monitor investments. You can even add your HSA debit card to Apple Pay® or Google Pay™.

If you need help, Fidelity’s customer service is available at 800-544-3716. I’ve found their team responsive, especially when I had questions about transferring an old HSA.

How I Login to My Fidelity 401k Account

Tips to Maximize Your Fidelity HSA

Based on my experience, here are some strategies to get the most out of your HSA:

Contribute the Maximum: If you can afford it, contribute up to the IRS limit to maximize tax savings and investment potential.
Invest Early: The sooner you invest, the more time your money has to grow. I started with low-cost ETFs to diversify my portfolio.
Keep Records: Save receipts for medical expenses in case you need to reimburse yourself later. Fidelity’s app makes tracking easy.
Consider Employer Contributions: If your employer contributes to your HSA, factor this into your savings plan. In 2020, the average employer contribution was $869.
Review Annually: Reassess your contributions and investments each year as your healthcare needs or financial goals change.

Potential Drawbacks to Consider

No financial product is perfect, and I want to be transparent. While Fidelity’s HSA is top-notch, here are a few things to watch for:

Investment Risks: Investing involves risk, and your balance could fluctuate. I stick to a balanced approach to mitigate this.
Employer Fees: If your HSA is through an employer, a recordkeeping fee (up to $48/year) may apply, though it’s often waived. Check with your employer.
Cash Interest Rates: Uninvested cash in the default Fidelity® Government Cash Reserves (FDRXX) may earn lower interest compared to competitors. If you’re not investing, compare rates.

Why Fidelity HSA Stands Out

Compared to other providers like HealthEquity or First Fidelity Bank, Fidelity’s HSA shines for its low costs, investment options, and user experience. Morningstar notes that Fidelity’s investment account has no threshold, unlike some competitors requiring higher balances to invest.

I also appreciate that Fidelity doesn’t charge maintenance fees for spending accounts, which isn’t always the case elsewhere.

If you’re debating between an HSA and an FSA, remember that HSAs offer more flexibility. You can even pair a Fidelity HSA with a limited-purpose FSA for dental and vision expenses, giving you the best of both worlds.

Final Thoughts

Opening a Fidelity HSA was one of the smartest financial moves I’ve made. It’s helped me save on taxes, cover medical expenses, and build a nest egg for future healthcare costs.

Whether you’re paying for doctor visits now or planning for retirement, a Fidelity HSA gives you the tools to take control.

I encourage you to explore Fidelity’s website, try their HSA calculator, and consult a tax advisor to ensure it fits your situation. With no fees, robust investment options, and a user-friendly platform, it’s an account that grows with you.

For more details, visit Fidelity.com or call 800-343-3548. Ready to start saving smarter? Your future self will thank you.