Best Health Savings Accounts for Your Money

If you use money outside of the HSA to pay medical bills now, you can build up cash tax-free for future medical expenses.

As long as you have an eligible high-deductible health insurance plan, you can open a health savings account with many banks and brokerage firms.

Caveat: If your employer limits payroll deduction of your HSA contributions to its recommended HSA provider, use that account so that your contributions avoid the 7.65% Social Security and Medicare (FICA) taxes and to ensure you get any company match. Once you’ve taken advantage of those benefits, though, you can transfer your funds to another HSA.

Great Deals on Practically Everything

Consider these deals for different types of HSA savers:

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For long-term goals

If you use money outside of the HSA to pay medical bills now, you can build up cash tax-free in your HSA for future medical expenses, such as health care in retirement.

HSA Bank offers a large menu of mutual funds and other investments through TD Ameritrade. The monthly account-maintenance fee of $2.50 is waived if you maintain a balance of $5,000 or more.

For near-term expenses

Credit unions offer the most-competitive rates. For example, Lake Michigan Credit Union (opens in new tab), which is open to anyone who donates $5 or more to the West Michigan chapter of the ALS Association, is paying 1.5% — or 2% on savings of $5,000 and up.

For a complete list of rates on HSAs, go to www.hsarates.com.

Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.