HSA Investment Growth Calculator
Enter your annual contribution, starting balance, and expected return to project your HSA balance over time. All growth inside an HSA is tax-free.
Inputs
Year-by-Year Balance
| Year | Starting Balance | Contribution | Interest Earned | Ending Balance |
|---|
The Tax-Free Growth Formula
Each year, the balance grows as:
Where r is the annual return rate. The contribution is treated as deposited at the start of each year (annuity due), which is equivalent to the closed-form: FV = C × [((1+r)^n − 1) / r] × (1 + r). Because all growth is tax-free inside the HSA, every dollar of return stays in the account and compounds — unlike a taxable brokerage account where annual dividends and capital gains are taxed.
For comparison: a 7% return in a taxable account is effectively ~5.5–6% after a 22% tax drag on annual distributions. The HSA retains the full 7%, which over 20 years compounds to a meaningfully larger balance.
Frequently Asked Questions
Once contributed, HSA funds can be invested in mutual funds, ETFs, or other instruments offered by your HSA provider. All dividends, interest, and capital gains accumulate without triggering annual taxes. When withdrawn for qualified medical expenses — at any age — no tax is owed on the growth either.
Most major HSA providers (Fidelity, HSA Bank, HealthEquity, Optum Bank) offer access to mutual funds and ETFs. Some providers also offer self-directed brokerage windows. A common low-cost strategy is a total market index fund. Check your specific provider for available fund options and investment thresholds.
If you can afford to pay medical expenses out-of-pocket, investing your full HSA contribution and letting it grow is a powerful long-term strategy. Receipts for qualified expenses can be saved indefinitely — you can reimburse yourself years (or decades) later, tax-free, effectively making the HSA a flexible tax-free cash reserve.
Many providers require a cash minimum (often $500–$1,000) before allowing investment of the excess. Some newer HSA providers (e.g., Fidelity HSA) allow investing from dollar one. Check your provider's terms.
At age 65, you can withdraw HSA funds for any purpose without the 20% early-withdrawal penalty. Non-qualified withdrawals are taxed as ordinary income — the same treatment as a traditional IRA. Withdrawals for qualified medical expenses remain tax-free at any age.