How to Do an HSA Trustee-to-Trustee Transfer: Forms, Fees, Timing

An HSA trustee-to-trustee transfer moves your Health Savings Account balance directly from one custodian to another without the money ever passing through your hands. You start the process at the new custodian by requesting a transfer form, they contact your old custodian and pull the funds, and the whole thing usually settles in two to five weeks. There’s no tax reporting, no 60-day clock, and no limit on how often you can do it.

Why a Transfer Beats a Rollover

The IRS recognizes two ways to move HSA money between custodians, and they are not interchangeable. A trustee-to-trustee transfer sends funds directly between institutions. You never receive a check, nothing gets reported as a distribution, and you can do it as many times as you want in a year. The IRS does not treat it as a rollover at all.¹

The alternative is a 60-day rollover. Your old custodian sends the funds to you personally, and you have exactly 60 days to deposit the full amount into another HSA. Miss that deadline and the whole amount becomes taxable income. On top of ordinary income tax, you’ll owe an additional 20% penalty if you’re under 65 and not disabled.²

HSA rollovers are also limited to one per 12-month period under Section 223(f)(5)(B), a cap that runs independently of the separate IRA one-rollover-per-year rule. If you received any HSA rollover distribution in the prior 12 months, another rollover will be taxable. Trustee-to-trustee transfers sidestep both the 60-day clock and the once-per-year cap, which is why they’re almost always the better choice.³

What to Line Up Before You Start

Pick the new custodian carefully. Fees, investment options, and minimum balance requirements vary widely. Some custodians charge monthly maintenance fees or require a minimum cash balance before you can invest, which drags on returns over time. Others offer low-cost index funds with no cash threshold.

If your current HSA holds investments, ask the new custodian whether they support in-kind transfers before committing. Many accept only cash, meaning your holdings would need to be sold before the transfer. Custodians that support the Automated Customer Account Transfer Service (ACATS) can move securities directly, sometimes in as little as three to five business days for the investment portion.⁴

Then gather the information you’ll need for the form. For both accounts, that means:

The full HSA account number at each custodian
Legal names, mailing addresses, and phone numbers for the transfer departments at both institutions
Whether you want a full or partial transfer, and the exact dollar amount if partial
For invested balances, whether to liquidate to cash or request an in-kind transfer of specific holdings

Double-check every account number. A transposed digit is the single most common reason transfers stall, and the delay can stretch weeks while both custodians investigate.

Filling Out and Submitting the Form

The process begins at the receiving custodian, not your current one. Request an HSA Transfer Request Form from the new provider. This form authorizes them to contact your old custodian and pull the funds on your behalf.

Medallion Signature Guarantees

Some custodians require a medallion signature guarantee before processing larger transfers. This is more than a notarized signature. A medallion guarantee verifies your identity and authorizes the transaction, and only institutions participating in an official Medallion Signature Guarantee Program can provide one. Your bank, credit union, or brokerage firm is the most likely source.⁵

Sending It In

Submit the completed form to the receiving custodian through their secure online portal, encrypted fax, or postal mail. Don’t email it. The form contains your account number and personal information. The new custodian takes it from there.

Handling Investment Assets

If your balance sits entirely in cash, the transfer is straightforward. When funds are invested in mutual funds, ETFs, or other securities, you have a choice to make.

An in-kind transfer moves your investments as-is, without selling them. This avoids market timing risk because you stay invested throughout the process. The catch is that both custodians must support the same investments. Proprietary funds, meaning funds created by and exclusive to your current custodian, almost never transfer in-kind. If the new custodian doesn’t offer the same fund, those shares will need to be sold regardless.⁴

Many custodians only transfer cash. If yours is one of them, you’ll need to liquidate your investments before the transfer can proceed. This is the most common reason transfers take longer than expected. Factor in the settlement period for selling securities, typically one to two business days, plus processing time. Without ACATS support, an in-kind transfer of investments can take up to two months. When you liquidate first, the full timeline is more predictable but usually still falls in the two-to-five-week range.⁶

If your HSA has both a cash account and an investment account, you may need to submit separate transfer requests for each. Ask the receiving custodian up front so there are no surprises.

Timeline and Tracking

Expect two to five weeks for the transfer to complete. Fidelity and other large custodians cite this range, while providers like HealthEquity warn that transfers from certain custodians can take eight weeks or longer.⁶

Check in with both institutions after two weeks if you haven’t received a status update. The originating custodian should confirm when the funds left, and the receiving custodian should confirm when they arrived and posted. If there’s any discrepancy in the amount, even a few dollars, follow up right away. Some custodians deduct an outgoing transfer or account closure fee from the balance before sending it.

Once the funds arrive, allocate them according to your investment preferences at the new custodian. If you requested a cash transfer after liquidating investments, your money will land in a cash holding account. It won’t reinvest itself.

When the Old Custodian Mails a Check

Sometimes the originating custodian will mail a check made payable to the new custodian but sent to your address. This can look alarming, but it’s still a trustee-to-trustee transfer as long as the payee line reads something like “New Custodian FBO Your Name.” Forward the check to the new custodian promptly. If instead a check is made payable directly to you, that’s a distribution, not a transfer. You then have 60 days to deposit it into an HSA to avoid taxes, and the one-rollover-per-year rule kicks in.

Transfer Fees

Many custodians charge an outgoing transfer or account closure fee, typically around $20 to $25. It’s usually deducted from the balance before the funds are sent, so the amount arriving at your new custodian will be slightly less than your full balance. Ask about this fee before initiating the transfer so the shortfall doesn’t surprise you.

Some custodians waive the fee if your balance is above a certain threshold or if you’re closing the account entirely. It’s worth asking. And keep the fee in perspective. If you’re moving to a custodian with lower annual fees or better investment options, a one-time transfer fee pays for itself quickly.

Partial Transfers and Employer HSAs

You don’t have to move everything. A partial transfer lets you keep some funds at your old custodian while sending a set amount to the new one. Watch the minimum balance rules. HealthEquity, for example, requires at least $25 to remain in the account for a partial transfer.⁷

Transferred funds do not count toward your annual HSA contribution limit, whether you move part or all of the balance. You’re moving existing money, not making a new contribution.⁷

This matters most for employer-sponsored HSAs. Federal guidance prohibits employers from restricting your ability to transfer HSA funds to another custodian, even while you’re still employed. Your HSA belongs to you. The practical wrinkle is payroll: most employers can only direct payroll deductions and their own matching contributions to the HSA provider they’ve selected. So if you transfer everything out, new payroll contributions will still flow into the employer’s chosen account. A common approach is to sweep the employer-linked account every few months, transferring accumulated balances to your preferred custodian. Since trustee-to-trustee transfers have no frequency limit, you can do this as often as you like.

Before transferring, confirm with your employer’s benefits department that moving funds won’t disrupt any employer match or contribution arrangement. The transfer itself shouldn’t affect employer contributions, but administrative hiccups happen.

What to Report on Your Taxes

This is where people worry for no reason. A true trustee-to-trustee transfer generates no tax forms and requires no entries on your tax return. The IRS explicitly instructs custodians not to report trustee-to-trustee HSA transfers on Form 1099-SA.⁸

On Form 8889, the HSA form you file with your return, you do not include the transferred amount as income, as a contribution deduction, or as a distribution. The IRS treats trustee-to-trustee transfers as if the money never moved from a tax perspective.¹

The receiving custodian will file Form 5498-SA reporting your account’s total contributions and any rollover amounts received for the year. A direct trustee-to-trustee transfer should not appear in the rollover box (Box 4) since the IRS doesn’t classify it as a rollover. It may not appear on the form at all. If you see a number that doesn’t match your actual new contributions for the year, contact the custodian to ask how they categorized the incoming transfer.⁹

If you accidentally end up with a 60-day rollover because the old custodian sent the check payable to you, different rules apply. You must report the distribution and the rollover contribution on Form 8889, and the originating custodian will issue a 1099-SA showing the distribution.³

When Different Rules Apply

The steps above cover a voluntary move of your own HSA to a different custodian. If HSA funds are changing hands because of divorce or the death of the account holder, the tax treatment and paperwork are different, and a spouse beneficiary is treated very differently from any other beneficiary. Check IRS Publication 969 and Publication 504, or ask the custodian, before treating those situations like a routine transfer.

1
Internal Revenue Service. IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans
2
Office of the Law Revision Counsel. 26 U.S. Code 223 – Health Savings Accounts
3
Internal Revenue Service. Instructions for Form 8889
4
HSA Bank. Transfer or Rollover HSA Funds
5
Investor.gov. Medallion Signature Guarantees: Preventing the Unauthorized Transfer of Securities
6
Fidelity Investments. Transfer a Health Savings Account (HSA) to Fidelity
7
HealthEquity. HSA — Contributions and Transfers
8
Internal Revenue Service. Instructions for Forms 1099-SA and 5498-SA
9
Internal Revenue Service. Form 5498-SA – HSA, Archer MSA, or Medicare Advantage MSA Information