Is an HSA a Brokerage Account? Understanding the Differences and Benefits

Health Savings Account (HSA) is a type of savings account that allows individuals to set aside money on a pre-tax basis to pay for qualified medical expenses. One common misconception is whether an HSA is a brokerage account. Let's clear up the confusion by explaining the differences:

Key Differences:

• An HSA is specifically designed for healthcare expenses, while a brokerage account is used for investing in stocks, bonds, and other securities.
• With an HSA, you can only use the funds for qualified medical expenses, whereas a brokerage account allows you to invest in a wide range of assets.

Benefits of an HSA:

• Contributions to an HSA are tax-deductible, grow tax-free, and withdrawals for qualified medical expenses are also tax-free.
• HSA funds can be rolled over from year to year, unlike Flexible Spending Accounts (FSAs) that have a
  

  Health Savings Accounts (HSAs) are often confused with brokerage accounts due to their investment capabilities, but they serve distinct purposes. An HSA is tailored for healthcare expenses, allowing you to set aside funds tax-free for medical needs, while a brokerage account is geared towards growing wealth through various investment options.