Are HSA Accounts Savings or Checking? Explained in Detail

Health Savings Accounts (HSAs) are typically considered as savings accounts rather than checking accounts. Here's why:

HSAs are designed to help individuals save money for medical expenses not covered by their insurance plan. They offer tax advantages and can only be used for qualified medical expenses.

While some HSA providers may offer a debit card for convenience, the account itself functions more like a savings account:

• Contributions are made by the account holder or their employer
• The balance in the account can earn interest
• There are annual contribution limits set by the IRS

Unlike a checking account, HSAs are not meant for everyday transactions. They are specifically earmarked for healthcare costs, making them more akin to a savings tool.

Health Savings Accounts (HSAs) are primarily viewed as savings accounts because they are intended to accumulate funds specifically for medical expenses that your health insurance does not cover. By allowing you to build a financial cushion for healthcare needs, HSAs serve as a smart savings tool.