HSA Investment Options: How to Pick the Right Fund With Confidence

Your HSA investment options can be a short menu, and a short menu means you can finish the decision in one sitting. Once your account is set up to invest, the real work is reading a handful of fund names, comparing a few fees, and matching each fund to the year you expect to use the money.

This post is about that menu and nothing else. I won’t repeat the tax rules or the receipt-saving strategy, which is covered in the HSA receipts strategy guide. Instead I’ll show you what the sources say a menu can contain, where the fees hide, how to read a fee table in a couple of minutes, and how to walk through a full example with real arithmetic. By the end you should be able to open your own account and know exactly what you are looking at.

What a Provider Menu Can Look Like

The three official pages I looked at show how different the choices can be, since each provider describes its own menu.

Fidelity says on its HSA page that you can invest in stocks (including fractional shares), ETFs, mutual funds and more, and that you can invest yourself or use its robo advisor, Fidelity Go. The page lists zero account fees and zero account minimums for HSAs offered through Fidelity.com, and it says there is no minimum to invest, although some individual funds may have their own minimums. For HSAs offered through an employer’s benefits package, Fidelity charges the employer a recordkeeping fee that may be up to $48 a year, which the employer may pass on to employees.

Optum Bank describes a more structured setup. Its page talks about choosing mutual funds once your cash balance passes a designated threshold, making one-time purchases or setting an automatic sweep that moves cash above a balance you choose into your funds. It only mentions mutual funds as the investment type.

HealthEquity published an investing guide for PwC employees, dated January 2022. It describes a lineup of mutual funds chosen and maintained by HealthEquity Advisors, including bond, stock, target-date, resource, real estate and commodity funds. You can pick funds yourself or use a guided tool. That guide is old and specific to one employer, so treat it as an example of a menu’s shape, not as today’s offer.

The takeaway is simple. Before you compare funds, find out which kind of menu you have, because HSA investment options differ between providers. A menu with a few mutual funds is a different decision from a full brokerage window. In my view, a short list can make the choice easier.

How Many People Actually Use the Menu

Devenir’s year-end 2025 research puts the numbers in perspective. It reports about 41.7 million HSA accounts, of which roughly 4.2 million, about 10%, were invested accounts. Those invested accounts held nearly $85 billion, around 49% of the roughly $174 billion in total HSA assets.

Two things stand out. First, about 10% of accounts are invested accounts. Second, those invested accounts hold a big share of the dollars: roughly 10% of accounts hold about half of the assets. My own arithmetic from Devenir’s figures puts the average invested account at about $20,200, against about $4,200 across all accounts and about $2,400 for accounts that are not invested. Devenir’s page doesn’t explain why.

The Types of Funds You Will Probably See

Here is a plain-language glossary of the fund types named in the sources.

Stock funds. These hold shares of companies. Some track a broad market index, some focus on a size or a region. Their value moves up and down with the stock market.
Bond funds. These hold bonds, and like other investments they can lose value.
Target-date funds. These mix stocks and bonds and change the mix over time toward a chosen year. Investor.gov explains that some are built to reach their most conservative point at the target date and others keep going past it, which is why it’s worth reading how a given fund describes itself.
Specialty funds. The HealthEquity guide lists resource, real estate and commodity funds alongside the others. These concentrate on one slice of the market.
Cash. Not a fund, but it is the other half of the decision. Cash in an HSA is what pays bills without selling anything.

Reading a Fund’s Fee Table in Two Minutes

Fees are the one part of this decision you can read straight off a page, so it’s worth learning where to look. Investor.gov defines the expense ratio as the percentage of a fund’s average net assets used each year to pay the fund’s operating expenses, including management charges, certain marketing and service fees and miscellaneous overhead. You’ll find it in the fee table of the fund’s prospectus.

Why bother with a number that looks tiny? The SEC’s Investor.gov bulletin on fees gives a clear example. It assumes $100,000 growing at 4% a year for 20 years. With a 0.25% annual fee, you’d end up with about $208,000. With 0.50%, about $198,000. With 1.00%, about $179,000. Same starting money, same assumed return, and a gap of roughly $29,000 between the cheapest and the priciest. The bulletin says the figures are approximate, and the assumptions are an illustration, not a forecast.

A good habit is to write the expense ratio next to each fund name on your menu. When the same kind of fund appears twice at very different prices, you’ll see it in seconds.

The Platform Fees Next to the Fund Fee

The fund’s own fee isn’t the only charge. Some providers add platform fees for investing. The HealthEquity guide for PwC employees lists three layers:

Fund expense ratios, set by each fund.
An administration fee of 0.03% per month on your average daily investment balance, capped at $10 a month.
An optional advisory fee of 0.05% per month, capped at $15 a month, if you use the guided tool. Choosing funds yourself carries no advisory fee.

The guide also says fees are charged to your cash account each month, and that if your cash is too low, billing is postponed and repeated unpaid months can suspend advisor access. Penn State’s 2019 notice about the same provider showed the same 0.03% and 0.05% monthly rates.

In the PwC guide the employer covered the advisory and administration fees, and the employee became responsible if they left the company, so a job change can change your costs. Fidelity’s page makes a similar point about employer-offered HSAs and a possible recordkeeping fee.

Worked Example: Jordan’s $12,000

Let me put numbers on this with an invented person. Jordan is a made-up reader with $12,000 ready to invest in an HSA that uses the HealthEquity-style fees above. Nothing here is a recommendation, and the fund fees are placeholders I chose for arithmetic.

First, the platform fees. The administration fee is 0.03% a month on $12,000, which is $3.60 a month, or $43.20 a year. That is well under the $10 monthly cap. If Jordan used the guided tool, the advisory fee would be 0.05% a month, or $6 a month, $72 a year, under the $15 cap.

Now add a fund fee. Suppose Jordan is choosing between two hypothetical funds, one with a 0.05% expense ratio and one with 0.75%. On $12,000 that is $6 a year versus $90 a year.

Setup	Yearly cost
Self-driven + 0.05% fund	$49.20
Self-driven + 0.75% fund	$133.20
Guided + 0.75% fund	$205.20

The spread from cheapest to priciest is $156 a year on $12,000. That is real money, but it isn’t a catastrophe, and it stays proportional as the balance grows. If Jordan’s balance reached $60,000 at the same rates, the percentage-based pieces would scale up (the monthly caps would begin to matter for the platform fees). The lesson is that costs are knowable. You can add them up in a few minutes and decide whether the extra service is worth it to you.

I’d also add one more honest note. The cheaper setup isn’t guaranteed to earn more. Fees are the part you can control and see in advance, and returns are the part nobody can promise. That is why the Investor.gov example is framed as an illustration.

A Short Path From Menu to Decision

Here is the process I’d follow to narrow your HSA investment options down to one choice, using only steps that rest on the facts above.

Open the investment tab and find the full fund list. If your provider shows only a few funds, great. Your decision is smaller.
Copy each fund’s name, type and expense ratio into a note. The fee table in the prospectus is the official place to confirm it.
Check for per-fund minimums. Fidelity’s page says some funds have their own minimums even when the account has none.
List the platform fees. Administration, advisory and any recordkeeping fee. Ask who pays them, you or your employer.
Decide which money is for which year. Money you expect to use soon and money you expect to leave alone for many years can sit in different places. The cash-versus-fund split is yours to set, and cash in the account is what pays bills without selling a fund.
Pick, then write the choice and a review date. I’d set a calendar reminder once a year to look at the fees and the mix.

Step five deserves a note. When I say money for different years can sit in different places, that is my own reasoning, not a rule from a source. If you will need a sum within a year or two, you might prefer to hold it as cash. If you won’t touch it for a long time, a fund may fit. Only you know your plan.

Mistakes That Quietly Cost HSA Investors

Choosing by name instead of by type. Read the type and the fee.
Ignoring platform fees because the fund fee is low. The HealthEquity guide shows how administration and advisory charges add up on top of fund costs.
Forgetting who pays. If an employer covered the platform fees, a job change can shift them to you.
Assuming every fund on the menu is open to you. Some have their own minimums, as Fidelity notes.
Investing every dollar and leaving no cash. Fees come out of the cash account in the HealthEquity setup, and a low cash balance can postpone billing and eventually suspend a service.
Treating one illustration as a promise. The Investor.gov example is an illustration, not a forecast.

Let an AI Assistant Check Your Fund Menu

You can paste this into an AI assistant. Fill in the brackets with what you see in your own account.

Help me review my HSA fund menu using ONLY the numbers I give you.

Funds on my menu (name, type, expense ratio, per-fund minimum if shown): [list]
Platform fees I can see (administration, advisory, recordkeeping, and who pays): [details]
Amount I want to invest: $[amount]
When I expect to need this money: [e.g., part in 2 years, part in 15+ years]

Rules:
- Ask me for anything missing before you calculate.
- Do not recommend a specific fund and do not predict returns.
- Show every calculation step by step: yearly fund cost = amount x expense ratio, and yearly platform cost from the rates I gave.
- Put the options side by side in a small table with the total yearly cost for each.
- Explain in plain language what each fund type is and the main way it can lose value.
- List which numbers I should confirm on the official fund page or prospectus.
- End with a short checklist and a date to review my choice.

My Take: Choose the Boring Menu Item on Purpose

Reading all of this, my view is that the biggest win among HSA investment options isn’t finding a clever fund. It’s the act of deciding at all. Devenir’s numbers say most accounts haven’t started investing, and a plain, low-cost fund chosen on purpose is a perfectly respectable result.

I also like that the decision is so small. A menu of a few funds, a column of fees, and a date on the calendar. If you do that once and revisit it yearly, you have a process, and a process beats a perfect pick you never get around to making.

What New HSA Investors Ask First

Do I need to pick individual stocks? No. Every menu described above includes funds. Fidelity’s page mentions individual stocks as an option for people who want them, but it also lists mutual funds and a robo advisor, and the other providers I looked at describe fund menus.

Is the expense ratio the only fee? No. The HealthEquity guide lists administration and advisory fees on top of fund costs, and Fidelity mentions a possible employer recordkeeping fee.

Are the PwC fee numbers what I will pay? Not necessarily. That guide is from 2022 and applies to one employer. I use it to show the structure of the fees.

Can I change my mind later? Optum’s page says you can shift money between funds, rebalance, or move money between your HSA and an investment account.

Is a target-date fund a good fit for an HSA? It can be one option on a menu. Investor.gov notes that target-date funds differ in how they treat the years after the target date, so read the fund’s description before choosing.

Your Ten Minutes With the Menu

Open your account, list your HSA investment options, write down the expense ratios and platform fees, and decide where each dollar belongs. That small page of notes is your whole plan. Pick one fund type that matches your timeline, set a review date, and let the account do its job.

This post is general information, not financial, tax or legal advice, and it does not recommend buying or selling any fund. Fund menus, fees and account rules change, and the examples use made-up people and placeholder fees. Confirm current details with your HSA provider and the fund prospectus, and talk to a qualified professional about your situation.

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