Questions and Answers

According to IRS Notice 2004-50, Q&A-65, an individual may invest his/her HSA funds in investments approved for IRAs (e.g. bank accounts, annuities, certificates of deposit, stocks, mutual funds, or bonds). An individual may not invest HSA funds in life insurance contracts or collectibles. The HSA trust or custodial agreement may restrict investments to certain types of permissible investments. HSA owners may want easy access to HSA assets to pay for qualified medical expenses, making some long-term investments with penalties for early withdrawal impractical for some people.