If you have a Health Savings Account (HSA) you are in charge of deciding where to store your money. You can keep the money in a bank savings account or you can choose to put your HSA money in an investment account.

The main difference between the two types of accounts comes down to risk. Bank savings accounts are safer than the money you keep in an investment account.

Banking on Safety

An HSA savings account works just like a regular bank savings account. There is no risk that the money in your account will drop in value. Moreover, an HSA savings account should come with FDIC-insurance. That’s a federal program that promises that in the rare instance where a bank runs into trouble, the FDIC will step in and make sure clients who have money in savings accounts don’t lose their money. The FDIC program insures individual accounts up to $250,000 at a bank. To confirm your bank is part of the FDIC program log on to your provider’s website and look for an “FDIC-Insured” logo on the homepage.

Investing for the Long-Term

When you opt for an HSA investment account you can invest your money in mutual funds, exchanged-traded funds (ETFs) and individual stocks. The value of an HSA investment account will rise and fall based on the performance of the investments you own. Moreover, investment accounts are not covered by the FDIC insurance program.

The Saving Versus Investing Tradeoff

The money you keep in a savings account will not earn a lot of money. The interest you earn on a bank account is typically less than one percent. That’s still a smart choice if you are using an HSA to help pay for current qualified medical expenses. Your priority is knowing the money will be there when you need to cover a health care bill.

But if you can pay for current medical out-of-pocket expenses from your regular income or savings accounts, you might want to consider an HSA investment account.

An HSA investment account can be a great way to save for retirement. An HSA gives you three tax breaks, making it an even better tax-saving option than traditional or Roth retirement accounts.

If you intend to use an HSA as a retirement account, you should consider investing it in a mix of stocks and bonds similar to your strategies for your other retirement accounts, such as 401(k)s and Individual Retirement Accounts (IRA). Over the long-term, a diversified portfolio of stocks and bonds has typically gained more than “safe” money stashed in a bank savings account.

Of course, over the shorter-term, there can be periods where an investment account will lose value. But if you can stomach those intermittent set-backs, over years –or decades – an HSA investment account may grow into a big chunk of money you can use tax-free in retirement.