Wellness savings accounts are becoming increasingly popular as more and more people want to be able to save for health-related expenses (e.g., visits to the chiropractor, massage therapist, acupuncturist, etc.). What is a wellness savings account (WSA)?
Wellness savings accounts are a type of high-yield savings account that exists between traditional savings accounts and checking accounts. The main difference between a WSA and a traditional savings account is that the former tends to focus on health-related expenses, while the latter focuses more on everyday necessities (e.g., groceries, rent, mortgage payment, utilities, etc.).
Wellness savings accounts were originally designed as an alternative to traditional savings accounts for those who want to save for health-related expenses. The idea behind WSA is that by keeping money in a separate account that is only accessible when you are sick or injured, you are less likely to spend it on non-health-related items. Additionally, while the interest rate on traditional savings accounts is generally paltry, the rates on health-related savings accounts are often a bit higher since the returns are usually backed by a hedge fund (i.e., a popular option when it comes to high-yield savings accounts).
Wellness savings accounts present a potentially attractive alternative to traditional savings accounts for those who want to save for health-related expenses. However, since they are a relatively new investment option, a lot of confusion still surrounds them. Thus, in this article, we will discuss what is Rollover and how it relates to Wellness Savings Accounts.
What is Rollover?
When you save money in a traditional savings account, the bank (or thrift) keeps track of how much you have saved using a special sort of account called a checking account. The checking account is simply a type of savings account that is ‘checked’ by the bank or thrift on a regular basis (e.g., once a month).
When you want to take money out of a traditional savings account, you give the bank or thrift your savings passbook. The passbook is a special booklet that contains all the information the bank or thrift needs to facilitate the transfer. This could include your name, account number, the amount of money you want to withdraw, etc. Once you have given the passbook to the bank or thrift, you can’t take it back. So, in effect, what you have is a loan that will have to be repaid with interest. This is how savings accounts work. When you want to save money, you get a checking account. When you want to spend money, you either cash a check or go into the bank and get a loan.
Wellness savings accounts are similar to traditional savings accounts, except that they are usually in the form of a check-writing or savings-checking account. To avoid any confusion, these types of accounts are often referred to as rollover accounts. When you open a rollover account, you are essentially giving the bank or thrift your checking account along with a small credit line that you can draw against. The bank will then create a new account with the special name of your choosing and will credit you with the amount you gave it. This is essentially the same as getting a loan from the bank. So, when you want to save in a rollover account, you get a checking account and when you want to spend, you either write a check against your checking account or access your credit line.
The advantage of rollover accounts is that you don’t have to go to the bank every month to check your savings account. So, in effect, you are getting interest on your money. The disadvantage is that the accounts usually only allow for a certain amount of spending each month. If you want to spend more than what is available in the rollover account, you have to take out a loan. This is where most of the confusion surrounding these types of accounts stems from. People believe that they have to put down a down payment and then will be able to spend as much as they want. However, this is not true. If you want to put down a down payment, you typically need to open a home equity line of credit or purchase a home mortgage that has an adjustable rate (e.g., an ARM).
Do I Have to Put Down A Down Payment To Use A Rollover Account?
You do not have to put down a down payment when you open a rollover account. However, if you want to make additional purchases with the money you have in the account, you will have to pay for them with something else (e.g., a credit card or cash). If you are looking to make a large purchase (e.g., a home appliance, car, boat, etc.), you will have to consider whether or not you should use a rollover account.
For example, if you have $10,000 in a rollover account and you want to buy a new car, you will have to decide whether or not to use the funds from your account. If you decide to use the money, you will need to pay for the car in cash. Alternatively, you could write a check against your account and the car dealership will deposit the check in their bank rather than cash it. In the latter case, you would not have to pay for the car with cash since the check would serve as payment. However, if you decide that you do not want to use the funds in your account to buy the car, you could simply remove the money from your account.
Most people who use rollover accounts tend to do so because they want to keep the money in case they need it. There are also loan products that exist where you do not need to put down a down payment and you can instead make payments as soon as you receive them. This is sometimes referred to as a no-interest loan since you are not charged interest on the loan (though you may be charged a service fee).
How Do I Access My Rollover Account?
You can access your rollover account via a computer or mobile device (e.g., phone, tablet, or laptop) that is connected to the internet. Once you are connected, you simply need to fill out a short form and indicate the amount you want to withdraw. You can make a payment to a third party by mailing a check or using an online bill payment service. You can also ask the bank or thrift to send you a monthly statement or give you an online account where you can monitor your spending. Finally, you can access your account information online at any time using your computer or mobile device.
You should note that some banks and thrifts may require you to verify your identity before they will allow you access to your rollover account. Simply provide the bank or thrift with some form of identification (e.g., a government-issued ID, credit card, etc.) that matches what is on file. In some cases, the bank or thrift may also ask for a copy of your birth certificate. This is to ensure that the individual accessing the account is in fact the person entitled to access it. Otherwise, the bank or thrift may be required to refund the funds to you or restrict your access to the account. In other words, you could lose your money if someone else with the same name as you turns out not to be the person entitled to access the account.
Why Do I Want To Use A Rollover Account?
It is a fact that healthcare costs are increasing and as a result, more and more people are seeking ways to save for healthcare-related expenses. One of the best ways to save for healthcare costs is to create a healthcare savings account. There are several reasons why you might want to use a rollover account rather than a healthcare savings account. First, creating a healthcare savings account entails a lot of paperwork and compliance with complex healthcare laws and regulations. Second, setting up a healthcare savings account typically requires you to put down a large amount of cash as a down payment. This is usually a problem for people who want to access the funds in case of an emergency (e.g., if they get sick or injured). Third, if you decide to take out a loan to fund your healthcare savings account, you will be charged interest and fees. Finally, if you already have a savings account and you want to make some additional purchases with the money you have in the account, there is no convenient way to do this. This is because banks typically do not let customers with savings accounts make immediate payments outside of the account. Thus, you will have to liquidate an asset or remove funds from your account to make the purchase. This can be problematic if you need the money for other purposes (e.g., if you are paying off debt or filling up an emergency fund).