Information Strategies, Inc. quarterly survey of more than 150 HSA custodial advisors indicates that total accounts will pass 3.6 million by January 2, 2007 managing $5.2 billion.

In its latest survey, ISI found substantial growth in deposits, particularly from industry leaders such as HSA Bank reporting 7,000 new accounts in this quarter raising its total accounts to 157,814.

Other custodians report similar increases. It is the new custodians reporting for the first time that indicate growth in HSAs has not slowed but rather deepened.

Based on its collecting of data from more than 150 custodians and reflecting some changes in HSA purchaser patterns first reported in May, ISI is estimating that 1.7 million total accounts will have put away $2.4 Billion in deposits by the end of the second quarter.

From the end of April to the beginning of July, almost all providers reported an increase in the total number of HSA accounts with average deposits growing to $1,940 for those accounts opened more than a year and $1,090 for those opened less than a year, on average.. All banks reported an increase in deposits with $1,200 being the average deposit for each account, though deposits ranged from $450 to $2,316.

Much of the deposited money is staying in the account. The majority of banks surveyed said at least 40% of deposited funds are staying put. Blackhawk Bank, for example, estimates that less than 10% of the money deposited into its HSAs is actually being spent.

Of the providers tracking such information, the majority report more family than individual HSAs. Several reported an even division between family and individual account while many said a majority of accounts were held for individuals. Some banks reported they were heavily focused on individual accounts. American Bank, for example, reported 100% of its accounts are individuals.

Another bank seeing the benefit of individual accounts is Preferred One. Eugene Sako said his bank just started offering individual groups in July 2006 and feels that growth will come through the individual and smaller business markets.

In that vein, surveys by ISI of its business readers surfaced a large swell for HSAs by smaller organizations. Of 1,100 small businesses contacted, less than 10% said they were reducing healthcare expenditures but 55% said they were poised to offer HSAs either as a single option or as part of a suite of healthcare insurance options.

Employers and companies continue to be the source of HSAs for the majority of providers. American Bank, though, reported only 10% of its accounts come from companies or employers, as did Thrivent Financial Bank.

HSA providers are also noticing anecdotal trends within the industry. Many report that education on HSAs has increased so they are opening more accounts for people seeing the benefits of HSAs.

Another anecdotal trend that Blackhawk Bank and Resource Bank reported was a slight increase in HSA fund usage that occurred at the same time gas prices increased. Paula Colling at Blackhawk Bank also pointed out that her bank sees more accounts from states offering a state tax deductibility, like Tennessee, Kentucky and Georgia. States that without such tax deductibility, like Wisconsin, where her bank is located, tend to lag behind, she said.