Whether you’re saving for a new home, vacation, emergency fund or a rainy day, it’s beneficial to have a savings account.
A savings account offers you easy access to funds securely saved for a specific goal or project, allowing you to accumulate wealth while you earn interest. Using a savings account reduces impulse spending and provides a reserve to pull from for overdraft protection on your checking account.
Compound interest daily and maintain an average minimum balance.
Get higher yields when you invest in a money market.
A money market is a type of financial market where short-term, low-risk securities are traded, such as Treasury bills, commercial paper, and certificates of deposit (CDs).
Money market funds, which are investment vehicles that pool money from multiple investors and invest in money market securities, are a popular way to access the money market.
Money markets are often used by individuals and institutions to invest excess cash that is not needed for immediate expenses. These funds typically offer higher yields than traditional savings accounts or checking accounts, while still maintaining a relatively low level of risk. They may require a higher minimum balance and limit the number of transactions that can be made each month.
An HSA not only helps you get a handle on rising health care costs, but provides a tax advantaged way to save.
It’s a great investment. Not only can you deduct your HSA contributions, but you may not have to pay taxes on the money when you spend it. Plus it’s always your money, not a “use it or lose it” investment like a Flexible Spending Account.
The rules that define an HSA eligible high deductible health plan can be complicated, so check with your insurance provider or employer to see if your health plan is HSA eligible.
A Health Savings Account (HSA) is a type of savings account that allows individuals to save money tax-free to pay for qualified medical expenses. To be eligible for an HSA, an individual must be covered by a high-deductible health plan (HDHP).
Contributions to an HSA are tax-deductible, which means that individuals can lower their taxable income by contributing to their HSA. The money in an HSA grows tax-free, and withdrawals for qualified medical expenses are also tax-free.
One of the main benefits of an HSA is that the money in the account rolls over from year to year, unlike a Flexible Spending Account (FSA), which has a “use it or lose it” rule. This makes an HSA a useful tool for saving for future medical expenses.
Another benefit of an HSA is that the account belongs to the individual, rather than the employer, so the account can be taken from job to job or used in retirement.
Overall, an HSA can be a valuable tool for individuals who are covered by a high-deductible health plan and want to save money tax-free for medical expenses.
Yes, as long as you cannot be claimed as a dependent on another person’s tax return, you can deduct your HSA contributions (except those made by your employer if offered).
You can take money out of your HSA without tax or penalty for qualified medical expenses. Qualified expenses that can be paid for with HSA funds include deductibles, copays, prescriptions, and other out-of-pocket healthcare expenses for medical, dental and vision. The money in an HSA can also be used to pay for qualified long-term care insurance premiums. The expenses can be incurred by either you, your spouse or any dependents.
HSA distributions not used for qualified medical expenses are subject to ordinary income tax and if taken before age 65, a 20% IRS penalty tax (unless the distribution is because of death or disability).
Be sure to consult your tax advisor regarding your HSA deductions and how to claim a tax-free HSA distribution. (Consult IRS Publication 969 for additional details).
Prepare for holiday shopping with your Christmas Club Account!
Save while you spend with the Smart Move Savings Program! Automatically round each debit card transaction up to the nearest dollar and we’ll deposit the change into your Wolf River Community Bank savings or Money Market account!Request Smart Move Savings