Best Health Savings Accounts (HSAs) Of February 2024 (2024)

To come up with this list of the best health savings accounts, Forbes Advisor analyzed 28 accounts at 27 financial institutions, including brick-and-mortar banks, online banks, credit unions and fintechs. We ranked each institution on nine data points within the categories of investment options, fees, digital experience and customer experience.

Here’s the weighting assigned to each category:

• Investment options: 40%
• Fees: 20%
• Digital experience: 20%
• Customer experience: 20%

For subcategories, we considered monthly fees, excess transaction fees, wire transfer fees, mobile app ratings, customer reviews, BBB grades and live chat availability. Accounts offering a variety of investment options, charging few fees and providing high-quality customer service ranked highest. HSAs must be nationally available to appear on this list.

To learn more about our editorial process and review methodology, check out our guide on How Forbes Advisor Reviews Banks.

A health savings account is a tax-advantaged savings account for individuals or families with high-deductible health plans (HDHPs). You deposit pre-tax money into an HSA and use funds for approved medical expenses such as copays, procedures and certain health products.

HSAs often earn interest and may also give you the option to invest your savings into mutual funds or other assets. Some do not pay interest or allow investing. Most HSAs include debit cards for paying qualified medical expenses directly, and some also support check-writing.

Employers typically partner with HSA providers to offer accounts to those who qualify and may even make contributions to these accounts as a benefit. All HSA contributions are subject to annual limits set by the IRS.

How Does an HSA Work?

If you’re enrolled in a high-deductible health plan, either through your employer or the public marketplace, you may be eligible to open an HSA. HSAs allow you to contribute money before paying income tax on it, meaning any funds you contribute lower your taxable income for the year.

There are limits on how much you can contribute to an HSA in a year, and both your and your employer’s contributions count toward this limit. The maximum contribution to an HSA in 2024 is $4,150 for individuals and $8,300 for families.

HSA funds used for qualified medical expenses can be withdrawn tax-free. These expenses can include copays, prescriptions and select health items such as sunscreen and over-the-counter medicine. HSA-eligible items can be purchased in person and online at pharmacies, retail stores and medical clinics. Any HSA funds you don’t use automatically roll over each year, so you don’t have to worry about a “use it or lose it” rule.

You can use HSA funds for non-qualified expenses, but doing so results in a 20% tax penalty. When you turn 65, you can start withdrawing HSA funds for anything and will pay income tax on distributions not used for qualified expenses. Some people use HSAs to save for retirement.

HSAs are available to individuals enrolled in HSA-eligible high-deductible health plans. An HDHP is defined as any medical insurance plan with a deductible of at least $1,600 for individual coverage or $3,200 for family coverage in 2024. And for these plans to qualify, annual out-of-pocket expenses can’t exceed $8,050 for individuals or $16,100 for families.

Many employers offer HSA-eligible health plans and work with HSA providers to offer access to accounts. You can also enroll in an HDHP through the public Health Insurance Marketplace.

To pick the best health savings account for your needs, consider the following:

• Plan fees. Some HSA custodians charge monthly maintenance, transfer and statement fees, and HSAs that allow investing commonly charge annual management fees.
• Investment choices. While some HSAs offer a wide selection of investments for you to choose from, others provide limited options that may not be ideal. And many HSAs don’t let you invest at all.
• Perks. HSAs often provide free debit cards as a basic perk. The best HSAs pay competitive interest and may include checks, waived transfer fees and in-person access.

Keep in mind that though many employers offering health benefits sponsor HSAs through specific providers, this does not mean you’re required to use your employer’s preferred HSA.

HSA funds can be used to pay for qualifying medical expenses for you, your spouse and your dependents. You can withdraw funds tax-free for eligible expenses. This includes:

• Medical or dental deductibles and copays
• Non-elective procedures
• Hospital or specialist bills
• Eye exams, eyeglasses and contact lenses
• Lab fees
• Insurance premiums
• Long-term care services or Medicare
• Medication
• Ambulance services

The full list of qualifying expenses is much longer than this.

To qualify for an HSA, you’ll need to pick an HSA-eligible healthcare plan. Consider your health insurance needs carefully before choosing a plan with a high deductible.

To open a health savings account, follow these basic steps:

• Enroll in an HSA-eligible high-deductible health plan.
• Sign up for an HSA through your employer or directly with an HSA provider.
• Provide your personal information (name, address, Social Security number).
• Provide proof of your HSA-eligible HDHP.
• Deposit funds and set up contributions through your employer, if applicable.
• Choose investments, if investing.

Always check with your employer before looking for an HSA, as they may offer specific benefits through a preferred provider. Some employers that offer HSA-eligible plans will also contribute money to your HSA monthly, quarterly or annually.

HSAs can be worth it if you’re enrolled or thinking about enrolling in an HDHP. Saving for upcoming medical expenses in an HSA can help you be more prepared for emergencies, and HSAs offer tax advantages other savings accounts often don’t.

In addition to annual savings at tax time, HSAs can earn compound interest to help you save more. And at age 65, you can use this account to supplement your retirement savings.

If your employer offers HSA contributions as a benefit, consider whether the amount they’ll contribute is enough to cover the deductible for your health plan. Choosing an HDHP can make sense when you don’t have to pay any of your own money toward the deductible and when you don’t have a lot of medical bills each year.

HSAs aren’t the only way to save on medical expenses. Here are two alternatives to HSAs worth considering.

Flexible Spending Accounts (FSA)

Flexible spending accounts (FSAs) are tax-advantaged savings accounts that allow you to save pre-tax money toward medical expenses, much like HSAs. But unlike HSAs, FSAs require you to use funds in the year they’re contributed. Leftover funds in an FSA generally don’t roll over to the next year. However, some FSAs permit you to roll over a portion of your balance up to an annual limit set by the IRS. In 2024, this limit is $640.

In 2024, you can contribute up to $3,200 to an FSA account through your employer annually. FSAs don’t require a special healthcare plan to enroll, so they might be a better option than HSAs for individuals without high-deductible health plans.

Health Reimbursem*nt Arrangement (HRA)

Some employer healthcare plans offer a health reimbursem*nt arrangement (HRA) to help employees pay for out-of-pocket medical expenses. Through an HRA, employee expenses are reimbursed from funds contributed by the plan’s owner, your employer. A plan’s owner sets rules and restrictions for how funds are to be used, and funds may roll over. HRAs are owned by employers, meaning you might not be able to take funds with you if you leave a company.

• Best High-Yield Savings Accounts Of September 2023
• Savings Calculator: How Much Could You Save?
• 6 Types Of Savings Accounts
• Capital One Savings Account Interest Rates
• Chase Savings Account Interest Rates