The number of banks that offer health savings accounts has more than tripled since the end of 2005, the Wall Street Journal reports. Market-research firm Information Strategies found that nearly 1,100 banks now offer HSAs, which allow consumers to set aside money tax-free for medical expenses when combined with a high deductible health insurance plan. According to the Journal, the "abundance of new HSA offerings is triggering competition that is helping to push fees lower and expanding the options for consumers to invest their savings."

HSAs typically accrue interest and give consumers tax breaks, but banks increasingly are offering other investment options in order to attract new customers.  This can offer additional benefits to consumers beyond those built into an HSA. Examples include:

• Bank of America this week is expected to announce plans to introduce a new credit card in partnership with major health plans that will allow holders to earn rewards points that convert to cash for their HSAs.
  
  
• In January 2007, customers will be able to invest their HSA balances in mutual funds offered by the Bank of America's Columbia Management arm.
  
  
• Later this month, JP Morgan Chase l will begin allowing individuals to enroll in HSAs online, rather than solely through their employers. The bank also offers mutual fund investments to its HSA holders.

Experts say the participation of larger banks in this field will increase awareness and adoption of HSAs by consumers.  The total number of HSAs by the end of 2006 is expected to grow to about 3.6 million with $5 billion in combined deposits, compared with 1.1 million accounts with deposits totaling $1.2 billion at the end of 2005, according to Information Strategies.