Choosing the right Bank for your Health Savings Account (H.S.A.)

Jim Scheihing,  Agent

You just enrolled in a Health Savings Account qualified Health Insurance Plan and now you need to choose a bank.  How do you know

what bank has the best Health Savings Account (H.S.A.) for you and your family?

There are a lot of options on H.S.A. accounts from national banks like H.S.A. Bank and Fidelity Investments to local banks in Oklahoma including Quail Creek Bank and Thoroughbred Bank.   I have recently found First American Bank out of Illinois that has no fees on a basic H.S.A. or you upgrade to the HSA Plus for $4.95 per month. I have not found any other no fee H.S.A. accounts, but I have found a lot of options in the $4.95 per month range. 

When selecting a bank you will want to look at interest rates, fees and services like you would compare any bank.  Plus you will want to look at there investment opportunities for long-term growth.  Keep in mind you might be setting aside a couple of thousand dollars to pay for medical expenses as they come up to meet your deductible but any of the money you save that you don’t spend for medical expenses you keep.  Once you fully fund your deductible, you can continue setting money aside tax-advantaged money for your annual deductible.  Since the H.S.A. monies you save are yours and they roll over from year to year they can add up pretty quick.

Example:  In 2018 you have a $2400 annual deductible and you set aside $200 per month in your H.S.A.   You only go to the doctor two times this year at $90 per visit (cash discount).  You set aside $2400 and you only spent $180, so you start 2019 off with $2220 in your account.  If you keep putting $200 per month in your H.S.A. account at the end of 2019, you will have $4620 in your account and only have a $2400 deductible.  If you choose a bank account that has investment options, you can move some of the money into investments with better returns than checking account or savings account.

  Once you have built up more money than what you may need to meet your deductible you can move the additional money into a tax-qualified mutual fund or other investment vehicles.  You will want to choose a Bank that offers you investments options above that of a basic savings or checking account.

One source we found helpful in comparing H.S.A. bank accounts is depositaccounts.com they have 66 banks listed in the order form the highest interest rates to the lowest rates.  The website also gives you the ability to sort the rates based on how much money you think you will have in the account. 

Thanks,

Jim


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