The Best Rates on Health Savings Accounts

NEW YORK (RateWatch) – One of the best options for paying for health care services is a health savings account, a specialized savings account that allows people with high-deductible insurance plans to put away some money to pay deductibles, co-pays, prescription costs and other health-related expenses. The money is tax free and rolls over from year to year, so you don’t need to worry about spending it all within a single calendar year like a flexible spending account (which, when you think about it, isn’t all that flexible).

The bad news is that new regulations imposed by 2009’s health care reform legislation make HSAs a bit less appetizing – the penalty for using the money for non-health expenses has been doubled, the money can no longer be used for over-the-counter medications and there’s now a cap of $2,500 on annual contributions to the account. But even with these new rules, consumers can still benefit from an HSA – especially if they get one with a good rate of return.

To see just how good a rate of return you can get on your HSA, we analyzed RateWatch data from banks around the country. Please note that RateWatch only gathers rate information on the lowest “tier” offered by the bank, so accounts with higher minimum deposits (and thus higher rates of return) were not surveyed. However, given the new cap on contributions, such accounts will start to become less prevalent.

For comparison’s sake, note that the nation average annual percent yield for an HSA is 0.28% and the national average for savings accounts in general is currently 0.171%. With that in mind, here are the top 10 HSAs with the highest rates (all of which, interestingly enough, are located in the Midwest).

The Top 10 Health Savings Accounts

Dane County Credit Union
State: Wisconsin
Rate: 2.52% APY
Minimum Deposit: $25

Washington State Bank
State: Iowa
Rate: 2.52% APY
Minimum Deposit: $200

Wright Patt Credit Union
State: Ohio
Rate: 2.5% APY
Minimum Deposit: $1

Iowa State Bank
State: Iowa
Rate: 2.02% APY
Minimum Deposit: $1

First National Bank in Fairfield
State: Iowa
Rate: 2.01% APY
Minimum Deposit: $100

First Federal Savings Bank
State: Indiana
Rate: 2% APY
Minimum Deposit: $1; there is also a maximum deposit of $2,499

Lafayette Community Bank
State: Indiana
Rate: 2% APY
Minimum Deposit: $100

Lake Michigan Credit Union
State: Michigan
Rate: 2% APY
Minimum Deposit: $1; there is also a maximum deposit of $999

Pilot Grove Savings Bank
State: Iowa
Rate: 1.51% APY
Minimum Deposit: $0

Mercantile Bank of Michigan
State: Michigan
Rate: 1.5% APY
Minimum Deposit: $1; there is also a maximum deposit of $2,499

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

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