Update(4/21/14): ElfCU now charges a $24 wire transfer fee for transferring your money from ElfCU to TDA.
Update(5/28/14): ElfCU now charges a $3 monthly account fee if you don’t hold at least $2,500 in the savings account. Still the best option in my opinion though.
Last year I wrote an article about how to rollover or use a trustee transfer in order to invest your HSA money for free using HSA Bank. Well it’s been a year and my investments have done very well(thank you S&P Gods), but I was only able to invest about $7,000 of my $12,000 balance. The reason why is that HSA Bank requires you to hold $5,000 in their savings account in order to avoid maintenance fees.
I had a short discussion with Blake in the comments section of that article about the opportunity cost of investing that $5,000. He argued that the investment gain would outweigh the few bucks a month in fees. Blake was totally right, but I still didn’t want to invest that money because I just couldn’t bring myself to pay a fee – it goes against everything I believe in 🙂 But alas, I’ve found a new credit union that allows me to invest all of my HSA money(hat tip to TFB).
ElfCU to Save the Day
I used to have two HSA’s. The first one was my HSA Bank account that was formed when I rolled over my last employer’s HSA(I no longer have this account anymore now that I’ve rolled it over to ElfCU) and the second one was through my current employer. I still have the second one but it’s administered by Health Equity and the investment options are very poor. There are a limited array of funds and most of the expense ratios are around 1%, yikes!
ElfCU is a small credit union that anyone can join with a $5 contribution to TruDirect. They have no monthly fees on their HSA’s and you can invest 100% of your account through TD-Ameritrade. TDA charges normal brokerage fees but they do have a wide selection of no cost ETF’s. Since HSA Bank also used TDA I’ll be able to keep the same funds and asset allocation.
So now I have two HSA’s: one with ElfCU and one with Health Equity. I plan on keeping my Health Equity account in cash and rolling it over once or twice a year for free to my ElfCU HSA where I can invest everything with no fees. So there you have it, I finally have an HSA that has no minimums and no fees and it lets me invest in my no cost ETF’s with TD-Ameritrade.
If you’re interested in rolling over your HSA to ElfCU the first thing you’ll want to do is open an account with ElfCU. You’ll have to make a $5 donation to TruDirect but that ends up showing up in your savings account once you’re all done. After I signed up, I got an e-mail confirmation from ElfCU with my member ID, HSA account number and money market savings account number.
Logging in to ElfCU HSA
Logging in to your ElfCU HSA is relatively easy. You can navigate to www.ElfCU.org/HSA and select HSA Account Login or you can use this link to go directly to their HSA login page.
I wasn’t able to register/create an ID for my HSA using my HSA number until the day after I signed up though. ElfCU uses a third party site called Marsh HSA Services to manage their HSA accounts. You can login/create a new ID using this page.
Logging in to ElfCU Online Banking
Since ElfCU uses a third party site for their HSA accounts you’ll need to create a separate login for their online banking system. You will also get a savings account when you sign up for an HSA since they are a credit union. This is the account that you would link to Mint or Quicken in order to view your HSA balance.
It took a few days(HSA login will be instant) before I was able to register for a new ID but the process was nearly identical to registering for the HSA member ID. After 3-4 days, I went to www.ElfCU.org and selected enroll in eBranch. When I logged on for the first time, I saw that I had $5 in my savings account and it also showed my HSA balance of $0.
Transfer Money from HSA Bank to ElfCU
Since I had investments through TDA/HSA Bank, I had to first liquidate my TDA account and transfer it back to HSA Bank(this process took about a week). Once the entire account balance was in the savings portion of my HSA Bank account and my accounts were all set up at ElfCU, I filled out a transfer form and e-mailed it to ElfCU at: [email protected].
This transfer form will effectively close out your old HSA and transfer it entirely to ElfCU. HSA Bank charges a $25 account closure fee but there are no other fees to transfer. If your HSA provider charges a transfer fee you can write yourself a check and do a direct rollover(only one of these allowed per year though) but that seemed like a lot of work for $25.
About 4-5 days after I e-mailed in my transfer form to ElfCU I noticed that my HSA Bank account had been liquidated(and I was charged a $25 account closing fee). 10 days after that, the money showed up in my ElfCU HSA and I opened a TDA account and got to investing!
Editor’s Note: I have no financial relation with ElfCU. But I use them because they don’t charge any monthly fees on my HSA account and I can invest my entire balance for free.
Readers, where do you invest the money in your HSA? Do you pay for all of your medical expenses out of pocket like I do so that you can maximize the triple-tax power of the HSA? Think it’s worth it to switch to ElfCU?
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-Harry @ PF Pro
Hah, I remember that comment Harry! I’m also with ELFCU now too! Just waiting for Chase to finish recording a final deposit from my past employer before I close the account, transfer the funds to ELFCU, and start investing. Chase also has an account closing fee.
FYI, I’ve been really impressed with ELFCU so far — great responsiveness from humans who want to help make your experience great!
Down with fees!
Harry Campbell says
Haha Blake, when you get called out on my blog, you know you’ve made it big. Feel free to refer potential girlfriends to this article if you want to impress them 🙂
I’ve been really impressed with ELFCU so far too, sign-up was a tiny bit confusing but after that everything was great. I dropped my money into 70% VB and 30% TIP a few weeks ago and have already lost a few hundred. Luckily I won’t be needing that money for a very long time.
Brian @ Luke1428 says
We use HSA Bank and have been pleased with it. This however, is worth a look. Thanks for sharing this info…I’ll definitely be checking them out.
Harry Campbell says
No problem Brian, I used to use HSA Bank but I didn’t like having to leave 5k in cash to avoid fees. ElfCU could always change their policy but that’s a risk you’ll have to take.
Jon @ Money Smart Guides says
Timely post! I just read about Eli Lily the other day and went ahead and made my TruDirect donation and opened my HSA with Eli Lily. I like that there are no fees and you can invest your money without the obnoxious fees that most other HSAs charge.
Harry Campbell says
Yea I was pretty happy to find out about ElfCU and their lack of fees. I also like that they partner with TDA and offer a wide variety of super low ER and free ETF’s.
Ed Mills says
Wow, this looks like a great find. Our HSA is currently at Alliant Credit Union where it’s losing the battle against inflation. This ELFCU option looks like it’s too good to be true. Are you sure there are no fees?
I’ll poke around a little more at the website to see what I can find. If this option is as good as it seems, then it’s a no-brainer!
Harry Campbell says
Ed, I’m glad you’re skeptical. It does sound too good to be true but there are no fees as long as you don’t do anything out of the ordinary. Like I mentioned, they could change their policy at any time but it’s very easy to do rollovers(although they do take 1-3 weeks) so that’s a risk I’m willing to take.
Harry, unfortunately just got a new fee notice from ELFCU: $3 monthly fee unless balance (excluding investments in TD Ameritrade) falls below an average daily balance of $2,500 (effective 7/1/14). Guessing this applies to every account (although I’ve had a $0 balance since I opened since I’m waiting for Chase (horrible!) to finish depositing some money and close my account).
All in all, disappointing, but not horrible. A little cash reserve on hand isn’t bad if you want to avoid the fees (and have $ for a health deductible or unexpected expenses). Alternatively, you could ask yourself, can I make at least $3 dollars a month on investing that $2500. 🙂
Harry Campbell says
Yea I got that too, it’s definitely a little disappointing but not a deal breaker. ElfCU was probably overwhelmed by the amount of people that signed up for their HSA and now they’re realizing that their fee structure isn’t feasible. Kind of like the companies that sell too many Groupons 🙂
Even though I hate fees, in this case, $36 a year is only a 1.44% fee on $2,500 so I’ll probably just go ahead and leave the money invested since I should be able to beat that. At the end of the day, they don’t make any money if you transfer all your money to TDA so the fee does make sense.
But if a new company emerges I’ll be sure to let everyone know. For now, I think ElfCU is still the cheapest/best option.