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Missing something?
If you've overlooked your HSA's investment feature, you might be

If you're not taking advantage of your account's investment feature, you could be passing up thousands of dollars in tax-free earning potential and missing out on one of the best ways to build your health care savings for retirement.

Turn HSA dollars sitting in cash into opportunity

Investing a portion of your HSA balance in mutual funds could add up over time. To illustrate the impact of investing, let's take a look at what you could have after 20 years if you invest $5,000 compared to if you would have left that same amount of money in cash. With investing, there is potential for that amount to grow to more than $13,000.

Keep some in cash, invest the rest

First, determine how much you want to keep in cash to cover short-term health care expenses. Then, consider investing the rest to take advantage of tax-free growth potential that could help you be prepared for future health care expenses. And don't worry—if needed, you can move money from your investment account back to cash to pay for any unanticipated or larger expenses that might come up.

A graphic showing what you could have after 20 years if you invest $5,000 compared to if you would have left that same amount of money in cash. A smaller red circle shows an amount of $5,309 in Cash, assuming an interest rate of 0.3%, while a larger blue circle shows an amount of $13,266 in Investments, assuming a 5% rate of return.

Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate, and when redeemed the investments may be worth more or less than their original cost. Scenario assumes a beginning balance of $5,000 with no additional contributions or withdrawals to illustrate the impact of a 5% rate of return on investments and a 0.30% interest rate on the cash account over 20 years.
Investing involves risks. There is always the potential of losing money when you invest in securities.

The long-term impact of HSA investing
Example: How it works for Anna

Contributes: $600 a month to her HSA—$7,200 annually, which is twice what she plans on spending, so she can get the maximum tax benefit from her account and save for the future.

Spends: $3,600 on qualified health care expenses each year for her family.

Balance: $3,600 unspent and uninvested at the end of the year.

An image of a woman sitting in her family room and using a laptop.

“AHA” MOMENT

Anna realizes there's a good amount of money just sitting in cash that could be working harder for her and decides it's time to explore the investment feature of her HSA.

Action: She uses the HSA calculator to get an idea of the potential growth impact if she invests over the long term.

Outcome: With a 5% rate of return, and with the same contributions and spending, Anna's balance could potentially grow to $131,789 in 20 years—about $50,000 more than if she keeps it in cash. With today's rising health care costs, the opportunity to save more for future health care needs is one she just can’t pass up.

A graphic showing how Anna's balance could potentially grow over 20 years. A shorter red bar representing HSA dollars in cash only assuming an interest rate of 0.7% shows a total of $81,426 after 20 years, while a longer blue bar representing HSA dollars invested assuming a 5% rate of return shows a total of $131,789 after 20 years.

Hypothetical results are for illustrative purposes only and are not meant to represent the past or future performance of any specific investment vehicle. Investment return and principal value will fluctuate, and when redeemed the investments may be worth more or less than their original cost. Scenario assumes annual contributions of $7,200 and annual spending of $3,600 for 20 years. The cash-only scenario assumes an interest rate of 0.70% and the investment scenario assumes a 5% rate of return.
Investing involves risks. There is always the potential of losing money when you invest in securities.

Don't miss out on the potential to save more for your future

Now that you've seen how investing can help you grow your health savings for retirement, it's time for you to unlock the potential of your HSA investment feature and see the impact for yourself.
Set up your investment account today.
Go to Home > Accounts > Investment Summary > Start Investing

Investing involves risks. There is always the potential of losing money when you invest in securities.

Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions. This material should be regarded as general information on health care considerations and is not intended to provide specific health care advice.

State and/or local income tax treatment of payroll contributions may vary. Participants may wish to consult with a tax advisor regarding the state income tax treatment of such contribution.

Potential Tax Advantages: You can receive tax-free distributions from your HSA to pay or be reimbursed for qualified medical expenses you incur after you establish the HSA. If you receive distributions for other reasons, the amount you withdraw will be subject to income tax and may be subject to an additional 20% tax, unless an exception applies. Any interest or earnings on the assets in the account are federal income tax-free. You may be able to claim a tax deduction for contributions you, or someone other than your employer, make to your HSA directly (not through payroll deductions). In addition, HSA contributions may reduce your state income taxes in certain states. Certain limits may apply to employees who are considered highly compensated key employees. Bank of America recommends you contact qualified tax or legal counsel before establishing an HSA.