Health Savings Account (HSA)

What is a Health Savings Account?

A Health Savings account is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses of you, your spouse, and your dependents.

Am I Eligible for an HSA?

  • You are eligible for a regular HSA contribution if, with respect to any month, you:
  • Are covered under a high-deductible (HDHP) on the first day of such month;
  • Are not also covered by any other health plan that is not an HDHP (with certain exceptions for plans providing preventive care and limited types of permitted insurance and permitted coverage);
  • Are not enrolled in Medicare; and
  • Cannot be claimed as a dependent on another individual’s tax return.

Health Savings Account Features

Debit Card

For your convenience and accessibility, First National Bank offers a  MasterCard® Debit card to HSA account holders to pay for medical goods and services wherever MasterCard® is accepted.  Funds are directly withdrawn from your HSA account for prompt and easy payment.

Debit card will be embossed with your name and “HEALTH SAVINGS ACCOUNT” to make it easy to identify the card that provides access to your health savings account.

For HSA debit cards, ATM withdrawals are not permitted.  For additional  terms and conditions, please refer to your Truth-In-Savings Disclosure received at account opening.


For your convenience, there are several methods to make contributions to your HSA account. There are no fees associated with any of our contribution methods.

  • Direct Deposit – This option allows account holders to select the amount, the day of the withdrawal and the account they wish to withdraw from. This option may be set up at anytime
  • HSA Contribution Deposit Slips – Use a deposit slip when mailing in a check for deposit or when making a deposit in person to your HSA account.
  • Employer Contributions – Employers will determine the method of their contributions at enrollment time. The following options are available:
  • Employer Contribution Worksheet – If an employer wishes to make contributions by mailing a check, they will be supplied with an Employer Contribution Worksheet. The worksheet will list all the employees participating in the plan and their contribution amount. The amounts will be totaled and one check will be mailed along with the worksheet.
  • Direct Deposit – Employers may choose to have a pre-determined monthly amount withdrawn from their business checking account for each employee. This amount will be withdrawn on the day determined by the employer.
  • Electronic Transfer (initiated by the employer) – An employer can choose to set up an Electronic Transfer from a business account. This option allows employers the freedom to make contributions when they want, for the amount they want and for the desired employees they want.

For annual limits on contributions to HSA accounts, please contact us at 512-321-2561 or 512-303-1003.

Additional Information

Rate Information – Your interest rate and annual percentage yield may change.
Frequency of rate changes – We may change the interest rate on your account at any time.
Determination of rate – At our discretion, we may change the interest rate on your account.
Compounding and crediting frequency – Interest will be compounded and credited to your account every month.
Effect of closing an account - If you close your account in person or by mail through a bank employee, you will receive the accrued interest. If you close the account in any other manner, you will not receive the accrued interest. Bringing your account to a zero balance will be considered closing the account.
Minimum balance to open the account – You must deposit $100.00 to open this account.
Minimum balance to avoid imposition of fees – $100.00.  A service charge of $5.00 will be imposed every statement cycle if the balance in the account falls below $100.00 any day of the statement cycle. 
Daily balance computation method – We use the daily balance method to calculate the interest on your account. This method applies a daily periodic rate to the principal in the account each day.
Accrual of interest on non-cash deposits – Interest begins to accrue no later than the business day we receive credit for the deposit of non-cash items (for example, checks).
Fees - An excess withdrawal fee of $1.00 will be charged for each debit transaction (withdrawal, automatic transfer or payment out of this account) in excess of six during a statement cycle.

Health Savings Account Rate Information
Tier 1 If your daily balance is $0.00 to $1,999.99, the interest paid on the entire balance in your will be 0.25% with an annual percentage yield of 0.25%.
Tier 2 If you daily balance is $2,000.00 or greater, the interest paid on the entire balance in your account will be 0.55% with an annual percentage yield of 0.55%.


May I claim a Federal Tax Deduction for My HSA Contribution?

Contributions to an HSA are tax deductible, the earnings grow tax deferred, and distributions to pay or reimburse qualified medical expenses are tax free. 

You may deduct contributions made by anyone other than your employer as long as they do not exceed the maximum annual contribution amount. Employer contributions are not wages for federal income tax purposes.

Rollovers and transfers from HSAs, IRAs, Archer medical savings accounts, health reimbursement arrangements, and health flexible spending accounts are not tax deductible.

This is intended to provide general information concerning the federal tax laws governing HSAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances or under your state tax laws.

For specific information, consult your tax or legal professional. IRS Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans, the instructions to IRS Form 8889, and the IRS’s web site may also provide helpful information.


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