Health Savings Account Agreement
Health Savings Account (HSA)
Minimum Balance to Avoid Imposition of Fees – A maintenance fee of $3.00 (plus applicable sales tax) will be imposed every statement cycle, after the first three statement cycles, unless you maintain a minimum daily balance of $500.00 each day for the monthly statement cycle. This maintenance fee will not be imposed in the first three statement cycles after you open your account.
Rate Information – Your interest rate and annual percentage yield may change.
Frequency or rate changes and determination of rate – At our discretion, we may change the interest rate on your account at any time.
Compounding and crediting frequency – Interest will be compounded every month. Interest will be credited to your account every month.
Daily balance and 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 noncash deposits – Interest begins to accrue no later than the business day on which we receive credit for the deposit of noncash Items (for example, checks).
Termination fees – A termination fee of $25 will be imposed when the account is closed.
Truncation – Images of canceled checks will not be returned with your monthly statement. Standard research fees, as disclosed in the Service Fee Schedule, will apply when obtaining imaged copies of canceled checks.
Supplemental Terms & Conditions of Health Advantage Checking
Overdrafts – If an Item is presented without sufficient funds in your account to pay it, whether it is presented in the form of a check or an ACH Item, we will return the Item unpaid (Returned Item) except for any Item which we deem the Bank is legally obligated to pay. If an Item is so paid without sufficient funds in your account, an overdraft will be created. Whether the check or ACH Item is paid or returned, the Overdraft/Returned Item fee will be assessed as disclosed in the Service Fee Schedule provided to you when you opened your account. ATM and debit card withdrawals that create an overdraft will generally be declined. There are limited circumstances when an ATM withdrawal or debit card withdrawal may be approved creating an overdraft. This may occur when, for example, the system is offline or the merchant does not obtain prior authorization for the transaction. Overdraft/Returned Item fees will not be assessed for overdrafts created by debit card.
The Internal Revenue Service (IRS) defines an overdraft on a Health Savings Account (HSA) as a prohibited transaction. According to IRS Code, if an HSA holder engages in a prohibited transaction, the HSA will cease to be an HSA on the first day of the year in which the prohibited transaction occurred. Further, the bank must treat the HSA as if all the assets were distributed on the first day of the year in which the prohibited transaction occurred. All overdrafts, including those created by a transaction, a fee, or an oversight, are prohibited. If an overdraft occurs on the HSA, the bank is required to close the account and report the January 1 balance as a nonqualified distribution. Nonqualified distributions are includible in your gross income and may be subject to a penalty. Further, if Items are returned unpaid (Returned Item) on four or more occasions in any rolling 12-month period, your HSA will be closed whether or not the transaction resulted in an overdraft on the HSA. Bankers Trust urges you to use the utmost care in managing your HSA account to avoid overdrafts and the possible closing of your account.
Contributions – All deposits (or transfers resulting in a credit to your account) are considered to be contributions made for the current year. In order to make a carry-back contribution for a specific tax year, you must come into a branch and notify us of the appropriate tax year by completing a HSA Contribution/Investment Form. Account owner assumes complete responsibility for: 1.) determining eligibility for the Health Advantage account every year contributions are made; 2.) ensuring all contributions are made within the limits set forth by the laws; and 3.) tax consequences of any contributions (including rollover contributions) and distributions.
Health Advantage Card (Debit Card) and Electronic Transactions – We permit some electronic fund transfers to and/or from your HSA. The electronic fund transfers we permit are offered for the convenience of managing your HSA. However, electronically moving funds to or from your HSA — for example, depositing more than the allowable amount, or getting additional cash back on an HSA debit card transaction — can raise a variety of tax concerns. As a result, before electronically accessing any account you may have with us, it is good practice to make sure you are using the correct access device (such as a card) or accessing the appropriate account for the transaction. Also, it is your responsibility to ensure the contributions, distributions, and other actions related to your HSA, comply with the law, including federal tax law. We recommend consulting a legal or tax professional if you have any questions about managing your HSA.
Types of Health Advantage Card Point-of-Sale Transactions Permitted – You may access your checking account(s) to purchase goods (in person, by phone, or on the Internet), pay for services (in person, by phone, or on the Internet), and do anything that a participating merchant will accept.
Health Advantage Point-of-Sale Transactions – dollar limitations – Using your card:
- You may not exceed $550 in transactions each calendar day (PIN-based transactions)
- You may not exceed $2,500 in transactions each calendar day (signature-based transactions)
Please see the Electronic Fund Transfers: Your Rights and Responsibilities section of the Consumer Terms and Conditions for a complete disclosure of electronic fund transfers services.
Qualified Medical Expenses / Use of the Account – You understand that your HSA is intended to be used for payment of qualified medical expenses. It is your responsibility to satisfy any tax liability resulting from use of your HSA for any purpose other than payment or reimbursement of qualified medical expenses. We do not monitor the purpose of any transaction to or from your HSA. We are not responsible for ensuring your eligibility for making contributions or ensuring withdrawals are used for payment or reimbursement of qualified medical expenses.
Relation to Other Agreements – The terms of this disclosure are intended to work in conjunction with the Health Savings Account Application and the Consumer Terms and Conditions provided to you. In the event of a conflict, the terms of the Health Savings Account Application control. See also the Service Fee Schedule given to you in conjunction with these disclosures for a schedule of fees that may be related to the account.