Understanding Fidelity HSA Required Cash Balance

If you have a Health Savings Account (HSA) with Fidelity, you might be wondering about the required cash balance. An HSA is a tax-advantaged savings account for medical expenses, but maintaining a cash balance is important to ensure you can cover qualified medical costs when needed.

While Fidelity does not have a specific required cash balance for HSAs, it's still essential to have sufficient funds available in cash within your account. Here's why:

• Out-of-pocket expenses: Having cash on hand allows you to pay for medical expenses not covered by insurance.
• Immediate access: Cash is readily available for you to use when you need it, especially for unexpected medical costs.
• Investment strategy: Maintaining a balance in cash ensures you have funds for short-term medical needs while potentially growing your long-term savings through investments.

It's recommended to keep at least some funds in cash in your Fidelity HSA to cover potential medical expenses. However, you can also consider investing a portion of your account balance for potential growth over time.

It's crucial to understand how a cash balance in your Fidelity Health Savings Account (HSA) can impact your overall financial health. Having cash readily available isn't just a good practice; it's a safety net for unforeseen medical expenses that may arise unexpectedly.