An HSA (Health Savings Account) is the only triple-tax-advantaged account in US tax code — tax-deductible contributions, tax-free growth, tax-free withdrawals for qualified medical expenses. After age 65, withdrawals for any reason are taxed at ordinary rates (like a Traditional IRA). It's the secretly-best retirement account most Americans underuse — IF you're enrolled in an HDHP (high-deductible health plan).
2026 contribution limits
- Self-only coverage: $4,300/yr
- Family coverage: $8,550/yr
- Catch-up (55+): +$1,000/yr
The 4 best providers
| Provider |
Cash interest |
Investment platform |
Fees |
| Fidelity |
4–5% APY |
Full brokerage, $0 min |
$0 |
| Lively |
4%+ APY |
Schwab investing, $0 min |
$0 personal |
| HealthEquity |
Tiered, lower |
Mutual funds |
$0 most accounts |
| Bank of America |
Lower |
Limited |
$30/yr (waived w/ balance) |
Best overall — Fidelity HSA
EDITOR'S PICK
Fidelity HSA
$0 account fees, $0 trading commissions, full investment selection (including FZROX at 0% expense ratio), 4–5% APY on cash. Best blend of features in the category. Use the same investment strategy as your Roth IRA (total-market index funds).
Visit Fidelity →
The HSA investment strategy
Most HSA holders make the same mistake: treat it as a checking account for medical bills. The optimal strategy:
- Contribute to HSA via payroll (skip FICA tax too)
- Invest the entire balance in low-cost index funds (FZROX at Fidelity)
- Pay current medical bills out of pocket if you can
- Save medical receipts forever
- Reimburse yourself decades later when you actually need the cash
Why this works: receipts have no expiration date for HSA reimbursement. Money invested at 35 grows tax-free for 30 years; you reimburse yourself at 65 with the saved receipts and pay $0 tax. Genuinely optimal.
Eligibility
You can only contribute to an HSA if you're enrolled in a qualifying HDHP (high-deductible health plan). 2026 minimums:
- Self-only HDHP: $1,650 deductible, $8,300 out-of-pocket max
- Family HDHP: $3,300 deductible, $16,600 out-of-pocket max
Most employer HDHP plans qualify. Marketplace plans labeled "HSA-eligible" qualify.
What's NOT worth your money
- HSA accounts at banks charging $30+/yr maintenance fees — switch to Fidelity for $0
- Employer-mandated HSA at provider with high fees + low rates — you can transfer to Fidelity any time, no tax event
- Spending the HSA on every medical bill instead of letting it grow — biggest mistake people make
- Overpaying for HDHP just to get an HSA — the math depends on your expected medical use
FAQ
HSA vs FSA — what's the difference?
HSA: own forever, rolls over, requires HDHP, can invest. FSA: use-it-or-lose-it (mostly), no HDHP requirement, smaller annual limits.
Can I have both an HSA and a 401(k)?
Yes — independent contribution limits. Common sequence: 401(k) match → max HSA → max Roth IRA → return to 401(k).
What counts as a qualified medical expense?
Doctor visits, prescriptions, dental, vision, mental health, OTC meds (since 2020), even some long-term care. Full list: irs.gov/publications/p502.
What if I switch jobs?
HSA stays with you. Roll over to your next employer's HSA, or to Fidelity. Tax-free transfer.
Can I use HSA money for non-medical expenses?
Before 65: yes but you owe income tax + 20% penalty. After 65: yes, taxed as ordinary income (no penalty) — works like a Traditional IRA.
Do I have to itemize to deduct HSA contributions?
No — HSA deductions are above-the-line; you take the standard deduction AND deduct HSA contributions.
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