What benefits do Health Savings Accounts (HSAs) provide?

Health Savings Accounts (HSAs) offer significant tax advantages that make Option C the correct answer. Contributions to an HSA are tax-deductible, meaning they can reduce your taxable income for the year in which they are made. This provides an immediate tax benefit to account holders.

Furthermore, the growth of funds within the HSA occurs tax-free. This means that any interest or investment gains within the account are not subject to taxes, allowing the funds to accumulate without being diminished by tax obligations over time.

Lastly, withdrawals from an HSA for qualified medical expenses are also tax-free. This triple tax advantage (tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses) makes HSAs a particularly beneficial savings tool for individuals planning for future healthcare costs.

The other options presented do not encompass the full range of benefits that HSAs provide. They either miss key elements such as tax-free growth or do not mention both contributions and withdrawals correctly. Hence, their descriptions do not reflect the comprehensive advantages that HSAs specifically offer to account holders.