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How To Invest With Your HSA — And Why You Should
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How to Invest With Your HSA, and Why
Health savings accounts have great benefits, including a triple tax advantage and the ability to invest your savings.
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Editor & Content Strategist
6 years of experience Expertise Investing for beginners financial advice long-term investingAlana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch.
Alana Benson is an editor who joined NerdWallet in 2019. Historically she has covered a wide variety of investing topics including stocks, socially responsible investing, cryptocurrency, mutual funds, HSAs and financial advice. She is also a frequent contributor to NerdWallet's "Smart Money" podcast. Alana has appeared on FOX Houston and the "PennyWise" podcast and has been quoted in MarketWatch and The Sun. Before joining NerdWallet, she wrote two books on identity theft and several young adult nonfiction titles. Her work has been featured in The New York Times, The Washington Post, The Associated Press, MSN, Yahoo Finance and MarketWatch. Published in Editor & Content Strategist + more + more
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Pamela is a thought leader in content diversity, equity, inclusion and belonging, and finds ways to make every piece of content conversational and accessible to all.She is a graduate of the Maynard Institute's Maynard 200 program, and the National Association of Black Journalists Executive Leadership Academy. She is a two-time winner of the Kansas City Association of Black Journalists' President's Award. She was also founding co-chair of NerdWallet's Nerds of Color employee resource group.
She is a graduate of the Maynard Institute's Maynard 200 program, and the National Association of Black Journalists Executive Leadership Academy. She is a two-time winner of the Kansas City Association of Black Journalists' President's Award. She was also founding co-chair of NerdWallet's Nerds of Color employee resource group. Managing Editor + more + more Nerdy takeawaysA health savings account (HSA) helps save toward medical expenses and also offers triple tax benefits.
Those benefits include tax-deductible contributions, tax-free growth and tax-free withdrawals.
You can invest HSA dollars the same way you would an individual retirement account (or other investment account).
Make HSA contributions by the tax-filing deadline to lower your taxable income.
Health savings accounts, or HSAs, are tools that pair with a high-deductible health insurance plan and make saving up for that deductible less painful. Think of it like a home for your medical money. Just like a 401(k) or an IRA, you’ll need to put money into the account before you make investments. Then, after you fund the account, you can start investing.
Health savings accounts , or HSAs, are tools that pair with a high-deductible health insurance plan and make saving up for that deductible less painful. Think of it like a home for your medical money. Just like a 401(k) or an IRA , you’ll need to put money into the account before you make investments. Then, after you fund the account, you can start investing.You can use money you put into an HSA to pay for qualified health expenses. And if you don't need it? You can invest that HSA money so it grows until you do need the money.
You can use money you put into an HSA to pay for qualified health expenses. And if you don't need it? You can invest that HSA money so it grows until you do need the money.HSA investment options
HSA investment optionsHSA providers offer a range of investment options, which may include:
HSA providers offer a range of investment options, which may include:Stocks and bonds
Stocks and bondsMutual funds
Mutual fundsETFs
ETFsSome HSAs offer tools that help you choose your investments. They also may provide automatic rebalancing so your portfolio stays within your preferred asset allocation. There may be minimum investment requirements before you can invest in some options.
Some HSAs offer tools that help you choose your investments. They also may provide automatic rebalancing so your portfolio stays within your preferred asset allocation . There may be minimum investment requirements before you can invest in some options.HSAs offered through an employer may have fewer options for how you can invest your money.
HSAs offered through an employer may have fewer options for how you can invest your money.Whatever option you choose, investing your money through an HSA will likely allow it to grow faster than by saving alone.
Whatever option you choose, investing your money through an HSA will likely allow it to grow faster than by saving alone.» MORE: How to find a financial advisor who can help you invest
» MORE: » MORE: How to find a financial advisor who can help you invest AdvertisementGet matched to a financial advisor for free with NerdWallet Advisors Match.
Take advantage of the triple tax benefit
Take advantage of the triple tax benefitOnce you start investing through your HSA, you can begin reaping the rewards. One of the biggest is the triple tax benefit, said Victor Medina, a certified financial planner and founder of Palante Wealth Advisors in Pennington, New Jersey.
Once you start investing through your HSA, you can begin reaping the rewards. One of the biggest is the triple tax benefit , said Victor Medina, a certified financial planner and founder of Palante Wealth Advisors in Pennington, New Jersey.These are the main tax advantages:
These are the main tax advantages:Contributions are tax-deductible.
Contributions are tax-deductible.Growth is tax-free.
Growth is tax-free.Distributions are tax-free when used for qualified medical expenses.
Distributions are tax-free when used for qualified medical expenses."Unlike a 401(k) or IRA, you don’t have to deduct money from the account at a certain age," Medina said.
"Unlike a 401(k) or IRA, you don’t have to deduct money from the account at a certain age," Medina said.If you’re investing over the long term in your HSA, that tax-free growth can make a significant difference in the amount of money you keep.
If you’re investing over the long term in your HSA, that tax-free growth can make a significant difference in the amount of money you keep.Prepare for long-term care
Prepare for long-term careThinking about getting older can be challenging for many reasons, not least of all because of the financial burden that can come with aging. For example, Genworth Financial's 2025 Cost of Care Survey
Thinking about getting older can be challenging for many reasons, not least of all because of the financial burden that can come with aging. For example, Genworth Financial's 2025 Cost of Care Survey Genworth Financial. Cost of Care Survey. Accessed Sep 25, 2025. found:The median annual cost of an in-home health aide is $77,792.
The median annual cost of an in-home health aide is $77,792.A private room in a nursing home costs about $127,750 per year.
A private room in a nursing home costs about $127,750 per year.But investing in an HSA can allow you to prepare for those expenses in advance.
But investing in an HSA can allow you to prepare for those expenses in advance.Here's a scenario: Say you invested $200 in an HSA every month starting when you were 30 years old. And you earned the stock market’s standard 10% annual return. By the time you were 70, you could have almost $1.3 million — a significant nest egg for your golden years.
Here's a scenario: Say you invested $200 in an HSA every month starting when you were 30 years old. And you earned the stock market’s standard 10% annual return. By the time you were 70, you could have almost $1.3 million — a significant nest egg for your golden years.It may be tempting to use your HSA money along the way. But Faron Daugs, a CFP and CEO of Harrison Wallace Financial Group in Libertyville, Illinois, often advises against that.
It may be tempting to use your HSA money along the way. But Faron Daugs, a CFP and CEO of Harrison Wallace Financial Group in Libertyville, Illinois, often advises against that.“With clients that are generally working and still making a living, if they do qualify to contribute, I often encourage them not to use those funds on an annual basis, so let them sit aside and grow almost like you would in an IRA,” says Daugs.
“With clients that are generally working and still making a living, if they do qualify to contribute, I often encourage them not to use those funds on an annual basis, so let them sit aside and grow almost like you would in an IRA,” says Daugs.Pay yourself back later
Pay yourself back laterIf you can avoid taking out HSA funds as you go, you can reap the benefits down the road. That's because you can roll over HSA funds from year to year. That's a major difference between HSAS and FSAs, or flexible spending accounts. With an FSA, you have to spend the money within a specific time, or you lose it.
If you can avoid taking out HSA funds as you go, you can reap the benefits down the road. That's because you can roll over HSA funds from year to year. That's a major difference between HSAS and FSAs, or flexible spending accounts. With an FSA, you have to spend the money within a specific time, or you lose it.“You are not required to reimburse yourself in the same year," Medina said. "You are only restricted to reimbursing yourself for expenses that occurred after the date the account was established."
“You are not required to reimburse yourself in the same year," Medina said. "You are only restricted to reimbursing yourself for expenses that occurred after the date the account was established."That means you could put money in the account now and let it grow for years. When you take it out as a lump sum in the future, it's not taxed. “Make sure to keep the receipts for what you paid out of pocket for medical expenses,” Medina said.
That means you could put money in the account now and let it grow for years. When you take it out as a lump sum in the future, it's not taxed. “Make sure to keep the receipts for what you paid out of pocket for medical expenses,” Medina said.See where you stand compared to households like yours, and get steps you could take to grow from here.
Run the numbersNWWP is an SEC-registered investment adviser. Registration does not imply skill or training. Calculator by NerdWallet, Inc., an affiliate, for informational purposes only.
NWWP is an SEC-registered investment adviser. Registration does not imply skill or training. Calculator by NerdWallet, Inc., an affiliate, for informational purposes only.Hack your IRA
Hack your IRAAccording to Daugs, HSAs have another little trick up their sleeve. You can rollover funds from a traditional or Roth IRA into your HSA. The amount could be up to your annual HSA contribution limit for that year.
According to Daugs, HSAs have another little trick up their sleeve. You can rollover funds from a traditional or Roth IRA into your HSA. The amount could be up to your annual HSA contribution limit for that year.The rollover helps if you have an unexpected medical expense and your HSA isn’t as fleshed out as you’d like it to be.
The rollover helps if you have an unexpected medical expense and your HSA isn’t as fleshed out as you’d like it to be.» MORE: How to invest your 401(k)
» MORE: » MORE: How to invest your 401(k)But while HSAs have a lot of benefits, they aren’t for everyone. Participants must be on a high-deductible plan to contribute to an HSA. That can be a deal-breaker for some. The health plan you choose during open enrollment will depend on your situation and the options available to you.
But while HSAs have a lot of benefits, they aren’t for everyone. Participants must be on a high-deductible plan to contribute to an HSA. That can be a deal-breaker for some. The health plan you choose during open enrollment will depend on your situation and the options available to you.On this page
HSA investment options HSA investment options Take advantage of the triple tax benefit Take advantage of the triple tax benefit Prepare for long-term care Prepare for long-term care Pay yourself back later Pay yourself back later Hack your IRA Hack your IRAOn this page
HSA investment options HSA investment options Take advantage of the triple tax benefit Take advantage of the triple tax benefit Prepare for long-term care Prepare for long-term care Pay yourself back later Pay yourself back later Hack your IRA Hack your IRA More like this Investment Basics Investing How Much Does a Financial Advisor Cost? Most financial advisors charge based on how much money they manage for you. Fees are typically 1% a year but can be lower. 2 By Andrea Coombes, Taryn Phaneuf Do You Need a Financial Advisor? 7 Ways to Tell You may need a financial advisor if you're facing big life changes, don't have financial goals, have complex compensation, high tax bills or for other reasons. Taryn Phaneuf How to Find Cheap or Free Financial Advice Quality financial advice is more accessible than ever — and much of it is free or inexpensive. Here's how to get it. Anna-Louise Jackson 3 Steps to Prepare for Your First Financial Advisor Meeting Here's what think about and bring to your first meeting with a financial advisor. June Sham