Charles Schwab does not offer HSA accounts directly, but you can use their brokerage platform to invest HSA funds you hold elsewhere

Charles Schwab Bank does not issue Health Savings Accounts. If you need an HSA, you must open one through a health insurance provider, a bank, or a dedicated HSA custodian—not through Schwab. However, once you have an HSA opened elsewhere, you can transfer the money into a Schwab brokerage account and invest it in stocks, bonds, and mutual funds rather than leaving it in a low-interest savings account.

This matters because most HSAs start with a basic savings component that earns little to no interest. Moving that money to Schwab lets you grow it over time, but the account itself—the legal HSA—stays with whoever issued it. You are moving the cash, not the account.

Key Takeaways

  • Charles Schwab does not open or administer HSAs; you must open an HSA through your health plan, a bank, or an HSA custodian first.
  • Once you have an HSA elsewhere, you can transfer money into a Schwab brokerage account to invest it in securities rather than hold it in cash.
  • The HSA itself remains with the original custodian—Schwab holds only the invested funds, not the account structure or tax status.
  • You will need to track contributions and withdrawals across two institutions, so keep records from both Schwab and your HSA custodian for tax time.

Where to actually open an HSA

Your health insurance provider is the most common place to open an HSA. When you enroll in a high-deductible health plan (HDHP), the insurer often offers an HSA as part of the package, sometimes with a partner bank handling the account. You can also open an HSA through a bank that offers them—Fidelity, Lively, HealthEquity, and Optum are major custodians—or through your employer if they sponsor one.

The custodian you choose matters because they set the fees, the investment options available within the HSA itself, and the ease of transferring money out. Some custodians charge monthly maintenance fees; others charge per transaction. Some let you invest in mutual funds right away; others require a minimum balance before investing is allowed. Compare these details before opening, because switching custodians later involves paperwork and can take weeks.

How to move HSA money to Schwab for investing

Once your HSA is open at another custodian, you can request a transfer of funds to a Schwab brokerage account. This is not the same as closing the HSA—the HSA stays open at the original custodian, but the cash moves to Schwab. You will have two separate accounts to manage.

Contact your HSA custodian and ask for a trustee-to-trustee transfer to Schwab. You will need to provide Schwab's routing number and your account number at Schwab. The transfer typically takes five to ten business days. Once the money lands at Schwab, you can buy stocks, ETFs, mutual funds, or bonds with it. Any gains or losses on those investments stay within the HSA tax shelter—you do not pay tax on the growth as long as you use the money for may have access to medical expenses later.

Do not withdraw the money to your personal bank account and then deposit it at Schwab. That breaks the trustee-to-trustee transfer chain and triggers a taxable distribution, which means you will owe income tax and possibly a 20% penalty if you are under 65.

What counts as a may have access to medical expense

HSA money can only be spent on may have access to medical expenses without penalty. These include insurance premiums (for Medicare, COBRA, or long-term care), deductibles, copays, coinsurance, prescription drugs, dental work, vision care, and many over-the-counter items like bandages and pain relievers. Mental health care, physical therapy, and hearing aids also count.

Money spent on non-medical expenses comes out of the HSA with income tax owed plus a 20% penalty if you are under 65. After age 65, the penalty goes away but income tax still applies. Keep receipts for every medical expense you pay from the HSA, because the IRS can ask for proof years later.

Tracking contributions and withdrawals across two accounts

When your HSA is at one custodian and your invested funds are at Schwab, you need to track both for tax reporting. Your original HSA custodian will send you a Form 5498-SA each January showing contributions made during the previous year. Schwab will send you a 1099 form if you have gains or losses on investments. You will also receive statements from both places showing deposits, withdrawals, and account activity.

For tax purposes, the contribution limit is the same whether your money sits in a savings account or invested at Schwab—$4,150 for individual coverage or $8,300 for family coverage in 2024, though these amounts change yearly. You can contribute to the HSA at the original custodian and then transfer the money to Schwab, or you can contribute directly at Schwab if it offers HSA accounts (which it does not, but some custodians do). Either way, only one contribution per year counts toward the limit across all your HSA accounts combined.

Fees and costs to watch

Charles Schwab does not charge account maintenance fees for most brokerage accounts, which is an advantage if you move HSA money there. However, you may pay trading commissions or spreads when you buy and sell securities. Schwab offers commission-free trading on stocks and ETFs, so those moves cost nothing. Mutual funds may have expense ratios—the annual cost built into the fund itself—which vary by fund.

Your original HSA custodian may charge a monthly fee or per-transaction fee to keep the account open, even if the balance is low or zero. Some custodians waive fees if you maintain a minimum balance or set up automatic contributions. Check your custodian's fee schedule before transferring money out, because you might still owe fees on the empty account.

Alternatives if you want everything in one place

If managing two accounts feels like too much work, you have other options. Some HSA custodians offer investment options within the HSA itself—Fidelity and Lively both let you invest in mutual funds and ETFs without moving money to a separate brokerage. This keeps everything in one place and simplifies tax reporting. The trade-off is that these custodians may charge higher fees or offer fewer investment choices than Schwab.

You can also leave your HSA money in the savings account at your original custodian and not invest it at all. This is the safest route if you plan to use the money for medical expenses soon, but it means your money earns almost no interest in a low-yield savings account. If you are young and healthy and expect to use the HSA as a long-term retirement account, investing makes more sense.

Frequently Asked Questions

Can I open an HSA directly at Charles Schwab?

No. Schwab does not issue HSAs. You must open an HSA through your health insurance provider, a bank, or an HSA custodian like Fidelity or HealthEquity. Once it is open elsewhere, you can transfer money to Schwab to invest it, but the HSA account itself stays with the original custodian.

What happens if I withdraw HSA money from Schwab for non-medical expenses?

You will owe income tax on the withdrawal plus a 20% penalty if you are under 65. After 65, the penalty disappears but income tax still applies. Keep receipts for all medical expenses paid from the HSA to prove they were may have access to if the IRS asks.

Do I have to transfer my HSA to Schwab, or can I leave it where it is?

You do not have to transfer it. If your current HSA custodian offers investment options you like, you can invest there instead. Transferring to Schwab is only worth it if your current custodian charges high fees or offers limited investment choices.

How long does a trustee-to-trustee transfer take?

Usually five to ten business days. Contact your HSA custodian to start the transfer and provide Schwab's routing and account information. Do not withdraw the money yourself, as that triggers taxes and penalties.

Will I get a tax form for HSA money I invest at Schwab?

Yes. Schwab will send you a 1099 form showing gains, losses, and dividends. Your original HSA custodian will send a Form 5498-SA showing contributions. You need both for accurate tax reporting.