Is Fidelity HSA FDIC Insured? - All You Need to Know About HSA Accounts

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Fidelity HSA FDIC insurance question explained

Health Savings Accounts (HSAs) are becoming increasingly popular among individuals looking to save for medical expenses in a tax-advantaged way. Fidelity is a well-known financial institution that offers HSA accounts to its customers. One common question that arises when considering opening an HSA with Fidelity is whether these accounts are FDIC insured.

Curious about whether your Fidelity HSA comes with FDIC insurance? Let's break down what that means for your health savings and how these accounts work.

Why HSA funds aren’t FDIC insured

FDIC insurance protects funds deposited in banks and savings institutions in case of bank failures, up to the specified limits. However, it is crucial to note that HSA funds are not typically held in bank accounts but rather in investment accounts, which are not covered by FDIC insurance.

What protects Fidelity HSA funds instead

Here are some key points to consider when it comes to the FDIC insurance and Fidelity HSAs:

• Fidelity HSA funds are held in investment accounts, not traditional bank accounts.
• Investment accounts are protected by SIPC insurance, which covers up to $500,000 in securities and cash, including $250,000 in cash.
• While not FDIC insured, Fidelity takes measures to provide a secure and reliable platform for HSA account holders.

In conclusion, while Fidelity HSA accounts are not FDIC insured due to being invested in the stock market and other securities, they are still a safe and viable option for individuals looking to save for medical expenses tax-free.