Health savings accounts underwent a rapid expansion in the first half of 2025, with total assets reaching $159 billion across 40 million accounts, according to Devenir’s latest midyear market survey.
The 16% year-over-year asset growth was fueled largely by a sharp increase in investment activity, as more account holders look to HSAs as both a spending tool and a long-term savings vehicle.
The latest data from Devenir show investment assets within HSAs jumped 30% over the past year to $73 billion, now representing 46% of all HSA assets.
The number of accounts holding investments rose to 4 million, up 23% from a year earlier, with these investors holding average balances of $22,635 – nine times the average for deposit-only accounts.
“HSAs saw strong growth in the first half of 2025, driven by steady contributions and market gains,” said Jon Robb, senior vice president of research and technology at Devenir. He added that more account holders are choosing to invest, while many households still use HSAs for current medical costs.
“That dual role, both spending account and long-term savings vehicle, continues to drive the popularity and growth of HSAs,” Robb said in a statement unveiling the results.
The Devenir report also highlights that withdrawals from HSAs grew faster than contributions in the first half of 2025. Contributions totaled just over $33 billion, up 6% year-over-year, while withdrawals reached nearly $23 billion, an 11% increase.
This echoes findings from a June report by the Employee Benefit Research Institute, which noted that one-third of accountholders withdrew more than they contributed in 2023, even as average balances continued to rise.
The EBRI research, based on a database of more than 14.5 million accounts, found that only 15% of accountholders invested their HSA assets in anything other than cash, and that employer contributions played a significant role in boosting both balances and investment rates.
“Our analysis finds evidence that accounts with employer contributions tended to have higher total contributions and more frequently contained investments other than cash,” said Paul Fronstin, director of health benefits research at EBRI. He noted, however, that employer contributions alone do not necessarily prompt accountholders to use HSAs as long-term savings vehicles.
Employer-affiliated accounts continue to dominate the market, representing 61% of all HSAs and holding 69% of total assets, according to Devenir. The average balance for funded accounts not affiliated with an employer, however, was slightly higher at $5,122 compared to $4,879 for employer-affiliated accounts.
Looking ahead, the HSA market is expected to see further expansion as new tax legislation signed in July will broaden eligibility beginning in 2026. A Barron's report explains how the rule changes are projected to make HSAs available to roughly 10 million more Americans, extending access beyond those with high-deductible employer health plans to include certain policies purchased through the Affordable Care Act’s marketplace and other structures.
Estimates for healthcare costs in retirement range from $150,000 to $250,000, and HSAs are seen as a powerful tool for meeting those expenses due to their tax advantages.
“HSAs are the most powerful way to pay for those expenses because of their tax advantages,” said Kevin Robertson, chief growth officer for HSA Bank, told Barron's.
Devenir projects the HSA market will surpass 47 million accounts and $208 billion in assets by the end of 2027. As the market matures, providers anticipate industry asset growth of 13% in 2025, with account growth expected to accelerate following the legislative changes.
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