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.