Growing Your HSA Dollars

Growing Your HSA Dollars

One HSA … Many Ways to Save

You decide how and when to use the money in your HSA. You can use HSA dollars to pay for eligible health care expenses you have now, or save — and perhaps invest — your HSA funds. It’s your choice!

HSA Deposit Account

After you set up your HSA, contributions go into your HSA Deposit Account. The money in this account bears interest on day one (accrued daily, paid monthly). And your Deposit Account funds are FDIC insured (up to the maximum amount permitted by law). When you have money in your Deposit Account, you can use the funds to pay for eligible HSA expenses that you and your tax dependents may have.

It’s easy to save money in your Deposit Account and grow your HSA funds over time. However, once you have a $1,000 balance in your Deposit Account — known as a “peg balance”* — you can invest additional funds in one or both investment accounts.

Money Market Sweep Account**

This account may allow you to earn higher yields while having funds quickly available to pay for eligible medical expenses. Money in this account is tied directly to your Deposit Account, so the balance is immediately available when you need it.

How a Money Market Sweep Account Works

  • Each night, funds in excess of $1,000 in the Deposit Account are automatically used to purchase shares of the institutional money market fund.
  • As you put more money into your Deposit Account, additional dollars are moved into the Money Market Account each night. You can’t make contributions directly into the Money Market Account.
  • Your available HSA funds include the money in your Deposit Account and Money Market Account. The combined funds can be used to pay for eligible medical expenses.
  • Money used toward medical expenses may cause your balance to fall below $1,000. If so, shares in the Money Market Account are sold that night to cover the shortfall.
  • Dividends paid from the Money Market Account go into your Deposit Account.

Please see the disclosure details below.

Self-directed Investment Account**

After you have a peg balance in your Deposit Account, you can invest excess funds into a Self-directed Investment Account. This gives you an opportunity to manage your investments — offering more than 170 different mutual funds to choose from. There is a minimum investment amount for purchasing the fund(s), and when you meet these requirements, you can open this account.

How a Self-directed Investment Account Works

  • When opening this account, a trading authorization is provided to UMB Financial Services. This gives you the authority to conduct purchase and redemption orders for the investment account.
  • You may direct the purchase of shares in any one or more mutual funds from those that are available.
  • You may opt for “recurring transactions” if you want to purchase the same mutual fund on a regular basis, such as each pay period.

Benefits of Having a Self-directed Investment Account

  • You can choose from one or more mutual funds from a number of nationally recognized fund families.
  • All gains are automatically reinvested.
  • Proceeds from the sale of mutual funds in this account are settled via the HSA Deposit Account.
  • The secure, easy-to-use brokerage website provides many investment tools that help you manage your account.

You can find more details about investment opportunities when you log in to your WageWorks account. In addition, please read the disclosure details below.

Disclosure Details

Neither WageWorks, UMB Bank n.a., nor UMB parent, subsidiaries, or affiliates provide tax, investment, or legal advice and web page is not intended as advisement. All mention of taxes is made in reference to federal tax law. States can choose to follow the federal tax-treatment guidelines for HSAs or establish their own; some states tax HSA contributions. Please check your state’s tax laws to determine the tax treatment of HSA contributions, or consult your tax advisor.

*A peg balance (currently $1,000) is set to determine the amount of money that moves in and out of the money market mutual fund. Funds in your HSA up to the $1,000 peg balance are a deposit in a FDIC-insured account. Funds in excess of $1,000 are an investment in a money market mutual fund that is not insured by the FDIC or any other governmental agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.

**Investments you make through your HSA are not FDIC-insured. Securities offered through UMB Financial Services, Inc., member FINRA, SIPC. UMB Financial Services, Inc. is a subsidiary of UMB Bank, n.a. UMB Bank, n.a. is a wholly owned subsidiary of UMB Financial Corporation. UMB Financial Services, Inc. is not a bank and is separate from UMB Bank, n.a. and other banks. Investments in securities, whether through the Money Market Sweep Account or through investments in the Self-directed Brokerage Account are:

Not FDIC-Insured • May Lose Value • No Bank Guarantee