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HSA investment, TD Ameritrade

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  • Avatar Andrew 
    Participant
    Status: Physician
    Posts: 41
    Joined: 12/02/2016

    I have opened account with HSA Bank this year. I plan to invest all founds through TD Ameritrade. However i have noticed VTI is no longer commission free.

    Would you still invest in VTI or would you change to SPTM which has similar profile and low expense ratio and is commission free?

    #99499 Reply
    cgossage cgossage 
    Participant
    Status: Financial Advisor, Website Sponsor, Spouse
    Posts: 485
    Joined: 09/12/2017

    I have opened account with HSA Bank this year. I plan to invest all founds through TD Ameritrade. However i have noticed VTI is no longer commission free.

    Would you still invest in VTI or would you change to SPTM which has similar profile and low expense ratio and is commission free?

    Click to expand…

    Yes.  It’s an unfortunate change for those of us who were spoiled by the free trades when the Vanguard ETF’s were available.  The performance of the two is very similar, but the volume of SPTM is much lower.  This becomes an issue when trading in larger lot sizes, which you are unlikely to be trading in an HSA.  Since we are talking about smaller dollars, SPTM should be fine.  Just make sure to use limit orders instead of market orders because the spreads of these shares can be larger than you were used to when trading VTI.

    Clint Gossage CFA, CFP, CPA
    cmgfin.com

    #99509 Reply
    Liked by Zaphod
    Zaphod Zaphod 
    Participant
    Status: Physician, Small Business Owner
    Posts: 6177
    Joined: 01/12/2016

    And the fees are like 5 bucks right? All in all, doesnt really matter, but agree just choose whatever similar low expense fund there is, brand shouldnt matter as much as sector/index, cost, liquidity, etc…

    #99523 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4520
    Joined: 05/13/2011
    Splash Refinancing Bonus

    I still bought VTI this year. I know, I know. $5 I’ll never get back again. But I think I kept at least some of that from a smaller bid/ask spread on the more liquid ETF. Plus, I’ve got to have a very good reason to use something that isn’t Vanguard, and saving $5 a year wasn’t a good enough one for me.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #99586 Reply
    DMFA DMFA 
    Moderator
    Status: Physician
    Posts: 2136
    Joined: 06/24/2016

    I still bought VTI this year. I know, I know. $5 I’ll never get back again. But I think I kept at least some of that from a smaller bid/ask spread on the more liquid ETF. Plus, I’ve got to have a very good reason to use something that isn’t Vanguard, and saving $5 a year wasn’t a good enough one for me.

    Click to expand…

    That’s one less McDonalds value meal you’ll be able to afford this year…can you handle that, though?  That could be a major hit to your seven-figure portfolio.

    This is a good point.  I see people complain about things like not having enough initial investment to buy Vanguard’s Admiral Shares (or similar premium shares) of a particular fund so they can drop their expense ratio by 0.11%.  That’s going to cost you a massive $6 on your IRA contribution over the span of that year.  Now, as it pertains to seven-figure portfolios, that small of a percentage can make a big difference.  Keep that perspective in mind.

    "I like money." - Frito Pendejo (Idiocracy)

    [Not a financial professional (yet), lawyer, or employee of The White Coat Investor]

    #99605 Reply
    Hank Hank 
    Moderator
    Status: Attorney
    Posts: 1395
    Joined: 03/27/2017

    $6.95 commission for Vanguard at TD Ameritrade.  That plus the $66 per year for HSA Bank was enough for me to cash out the account and consolidate with my Payflex account from work.

    Not big money, but enough excuse to go from two accounts to one.  Plus the TD Ameritrade guy on the phone claimed that Vanguard were the ones requiring them to go off the commission free list.  I called BS.

    #99705 Reply
    Avatar Andrew 
    Participant
    Status: Physician
    Posts: 41
    Joined: 12/02/2016

    Thanks for an advise.  Since I am relatively new to this stuff , just wanted to make sure I am not overlooking  hidden costs that will raise expense ratio substantially. Plus, I hope I don’t have to pay 6.99$ each time dividend is reinvested:) That would be a game changer. Will stick to Vanguard.

     

    #99745 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4520
    Joined: 05/13/2011

    $6.95 commission for Vanguard at TD Ameritrade.  That plus the $66 per year for HSA Bank was enough for me to cash out the account and consolidate with my Payflex account from work.

    Not big money, but enough excuse to go from two accounts to one.  Plus the TD Ameritrade guy on the phone claimed that Vanguard were the ones requiring them to go off the commission free list.  I called BS.

    Click to expand…

    Because Vanguard refuses to pay them a marketing fee?

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #99768 Reply
    Liked by Hank, Zaphod, cgossage
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4520
    Joined: 05/13/2011

    Just finished a big post on best HSAs for investing this morning. HSA Bank came in second on my list. Lively was first. If I were opening a new one today, that’s where I’d open it. Still trying to decide if it is worth the hassle to switch to save $11 this year and $36/year after that. Others in my top 5 were Elements Financial, Saturna, and Bank of Cashton.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #100235 Reply
    Avatar Tabaxus 
    Participant
    Status: Attorney
    Posts: 103
    Joined: 01/15/2018

    When is that blog post coming out?  Re-evaluating my account at HSA Administrators given the almost $100 of fees I paid last year, even though they do have fantastic investment options.

    #100241 Reply
    The White Coat Investor The White Coat Investor 
    Keymaster
    Status: Physician
    Posts: 4520
    Joined: 05/13/2011

    When is that blog post coming out?  Re-evaluating my account at HSA Administrators given the almost $100 of fees I paid last year, even though they do have fantastic investment options.

    Click to expand…

    A few weeks.

    HSA Administrators was 10th on my list of 12. But if you’re complaining about $100 of fees, you’re not going to like anybody much as most of them cluster around that figure. The lowest I can figure out to get fees is $14.95/year with Saturna, and that’s with a single trade during the year. I could get Lively down to $37/year with a single trade.

    The problem with HSA Administrators is that pesky AUM fee. It’s not much on a tiny account, but it would be the most expensive option for me given the size of my HSA. Flat fees are better for large accounts, AUM fees are better for small accounts, just like with financial advisors.

    Site/Forum Owner, Emergency Physician, Blogger, and author of The White Coat Investor: A Doctor's Guide to Personal Finance and Investing
    Helping Those Who Wear The White Coat Get A "Fair Shake" on Wall Street since 2011

    #100249 Reply
    Avatar Tabaxus 
    Participant
    Status: Attorney
    Posts: 103
    Joined: 01/15/2018

    Yeah–the reason the $100 kind of struck me was the fact that my AUM is going to start going up with them.  For a couple of years I had split accounts because my work’s direct deposit (which I had to use to get the small employer-side contribution) went into a different account.   REALLY didn’t like the work-based account, so I kept the two accounts separated.  Now that I’m no longer eligible for the employer-side contribution, and now that I’m on a family plan (spouse no longer has university insurance) so I have the full family amount going in, the AUM fee with HSA Administrators is looking far worse going forward.

    #100251 Reply
    Avatar Andrew 
    Participant
    Status: Physician
    Posts: 41
    Joined: 12/02/2016

    So when I let automatically reinvest  all dividends and interest in VTI do i pay each time 6.95$ transaction fee??

    #134135 Reply
    Avatar spike 
    Participant
    Status: Physician
    Posts: 1
    Joined: 08/25/2018

    Just starting my HSA this year through lively (thanks for the recommendation WCI!). Is there a way to set it up through TD ameritrade to automatically have the money transferred to VTI or other index fund or do I have to buy the mutual fund every month?

    #146595 Reply
    Avatar bonebrokemefix 
    Participant
    Status: Physician
    Posts: 57
    Joined: 04/10/2017

    So when I let automatically reinvest  all dividends and interest in VTI do i pay each time 6.95$ transaction fee??

    Click to expand…

    Slight necropost to see if this is the case?

     

    And silly question, but is it better to fully fund the HSA early in the year and then buy VTI all at once? That would be 6.95 once rather than spreading the HSA max out over the year and paying it 12 times, but then you are at the mercy of whatever the price is in January. I also use HSA Bank and TD Ameritrade.

    #174943 Reply

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