What purpose does a Health Savings Account serve?

A Health Savings Account (HSA) primarily serves to allow individuals to save money on a tax-advantaged basis for the purpose of paying for qualified medical expenses. Contributions made to an HSA can be deducted from taxable income, thereby providing a tax benefit. Additionally, the funds in the account can grow tax-free, and withdrawals for qualifying health expenses are also tax-free. This unique combination makes HSAs a powerful tool for managing healthcare costs, encouraging individuals to save specifically for medical needs while enjoying favorable tax treatment.

The other options describe features that do not align with the primary purposes of an HSA. While HSAs may be held in accounts that earn interest, they are distinct from general savings accounts, investment accounts, or any loan provisions, as they are focused explicitly on health-related expenses and benefits.