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Ken Tumin founded the Bank Deals Blog in 2005 and has been passionately covering the best deposit deals ever since. He is frequently referenced by The New York Times, The Wall Street Journal, and other publications as a top expert, but he is first and foremost a fellow deal seeker and member of the wonderful community of savers that frequents DepositAccounts.

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The Adirondack Trust Company1.00%--Health Savings Account
Accounts mentioned in this post. Rates as of April 24, 2014

Top Rate for Health Savings Account at The Adirondack Trust Company - Available Nationwide

POSTED ON BY

The Adirondack Trust Company

The Adirondack Trust Company is offering a very competitive rate on its Health Savings Account (HSA) of 5.00% APY. However, this is scheduled to fall to 3.00% APY effective May 1, 2011. These rates and date are listed in the bank's deposit rates page. Even with the new rate, it'll still be very competitive. A reader reported being told that the 5% had held since the inception of the account in 2006.

I confirmed last week that the bank accepts applicants from any state. Here's the reply that I received from the bank:

You can open an account with us online. We have people from all over the US that have HSA accounts with us. You can do the whole process online and would not have to send us any paperwork unless your are transferring another HSA to us.

A reader described his experience opening this HSA in this forum thread:

I went through the online application and found two issues. First while you can open the account with an electronic transfer the limit is $2,000. You can open the account online with a $0 balance and mail a check which is what I am doing. The account showed up the same day I opened it and I was able to access it online. The second issue is that nowhere in the online app process do they ask what year the contribution is for which is another reason I mailed in a check as I am making the 2010 contribution.

You can't set up ACH through them but if your bank allows you to initiate ACH transfers you can presumably set it up with them that way. In fact I have set that up and it was successful.

Thanks to the reader for providing these details.

The bank is based in Saratoga Springs, New York with branches in Saratoga Springs and surrounding cities.

The bank has an oveall health score at DepositAccounts.com of 4 stars (out of 5) with a Texas Ratio of 6.66% (excellent) based on December 2010 data. Please refer to our financial overview of The Adirondack Trust Company for more details. The bank has been a FDIC member since 1934 (FDIC Certificate # 660)

Health Savings Accounts Overview and the Best HSA Rates

The recent guest post, Saving for Medical Expenses with an HSA, described many of the details of how HSAs work. There are annual contribution limits that are set by the federal government. That is probably an important reason banks can offer higher rates on HSAs. Also like IRAs, there's more paper work to transfer HSAs to other banks. So people are more likely to stick with their bank and HSA. So that gives banks an incentive to offer higher rates.

Some credit unions offer good deals on HSAs. Two in particular are Alliant Credit Union and Connexus Credit Union. Both offer easy membership. As of 4/17/2011, Alliant's HSA is paying 2.00% APY on balances of at least $100. Connexus's HSA is also paying 2.00% APY but on balances of at least $15K.

To find the highest HSA rates that are available nationwide and in your state, please refer to our HSA rates table.

  Tags: The Adirondack Trust Company

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Comments
11 comments.
Comment #1 by Anonymous posted on
Anonymous
I set up an ACH transfer from my paycheck to the HSA at this bank.  The one thing to note is that they treat ACH deposits as current year contributions to the HSA.  If you want the deposit to appy for the previous year, I had to send a check indicating that the contribution was for a previous tax year.  The thing with a HSA contribution made after the end of a tax year involves pre-tax contributions treatment.  Since the current year FICA and Medicare tax is not withheld for the contributions made between January 1 to April 15 for most ACH payroll pre-tax deposits, that money therefore could not be tied to a previous year.  Checks (which are post-tax treatment) can be handled differently.

3
Comment #2 by Anonymous posted on
Anonymous
Bait and switch and then the Congress will kill the HSA, there is a bill pending to do just that.

3
Comment #3 by Anonymous posted on
Anonymous
With the budget deficits and S&P downgrading of US debt, the move will be to stop ways of avoiding paying taxes.  HSAs were seen as a way of high income earners to avoid paying taxes on the HSA contributions and earnings. IRAs may be next.  Then the mortgage interest deductions.  The country needs more tax revenue so no more tax breaks.

1
Comment #4 by jcgc50 posted on
jcgc50
When we opened our account with Adirondack I set up ACH transfer through my bank to this account. I learned that the trial credit/debit the bank makes would be treated as deposit and withdrawal for tax purposes. Not a big deal considering the small amount. However, when I called to inquire about that I was told they could correct that. We will see what happens at the end of 2011 when the 1099 comes out.

2
Comment #5 by Anonymous posted on
Anonymous
Health Savings Accounts offer such great benefits to insured that if marketed properly could be a boom to hsa providers.

What they loose in average commissions could easily be made up for in overwhelming volume.

Additionally, with the passage in 2010 of the Patient Protection and Affordable Care Act, hsas will look extremely attractive especially to those currently uninsured.

This is because of the mandatory coverage requirement for all.  Since hsas have such a low premiums, an health savings account which grows tax free, they will be very appealing.

 More information can be found at  http://www.womens-health-symmetry.com/health-savings-account.html

2
Comment #6 by Anonymous posted on
Anonymous
Just opened this account last night.  Wanted to rollover funds from my existing HSA which is not at a competitive rate.  Upon speaking with the agent regarding the details of doing that, I was advised that starting October 1st, a $4 monthly maintenance fee was going to apply to all HSA accounts at Adirondack. Just FYI so that everyone factors that into their decision making re; this account.  Unfortunately, this means I will be closing mine.

2
Comment #7 by Anonymous posted on
Anonymous
My wife and I also have HSA accounts at Adirondack Trust and are in the process of moving them.  Unfortunately, we have to do this to keep an acceptable interest rate and terms - this will be the 4th move since 2004.  I've identified 4 instututions that have rates & terms more favorable than ATC for balances > $10,000.

3
Comment #8 by lou posted on
lou
#7 - can you tell us the 4 institutions.

 

1
Comment #9 by Anonymous posted on
Anonymous
Yes, please list other banks that offer a better rate than Adirondack


Thanks

 

1
Comment #10 by ohreally posted on
ohreally
Under the "Savings account" menu at the top of this page, click on "Health Savings account".

1
Comment #11 by Anonymous posted on
Anonymous
I opened my account a yar ago.  Started recieving a service charge of $4/month this year without any notice.  INterest rate droped to 3% and the beware the debit card does not distinguish between a qualified purchase or non-qualified like most HSA/MSA debit cards.  This is a low service bank account that offers a decent interest and that is about it. 

1
Comment #12 by Anonymous posted on
Anonymous
Heads up, their rate just dropped like a rock:

Health Savings Account*
*Effective 1/1/13 the APY and Interest Rate will be 1.00%

1