Right now my HSA is in a default FDIC insured account of some sort that has a paltry 0.05% interest. I want to get a bit more return on it. However, I don't want to fully invest it. My desire for the HSA is to use it as a medical emergency fund. Small everyday medical expenses, I will pay outside the HSA. But if I do run into a big emergency that costs a good chunk of money, then I feel like I might as well spend the HSA funds. But mostly I'm planning on letting it grow into retirement.
My HSA provider offers a variety of Vanguard funds. Since I'm in California and I want to keep it pretty low-risk, I was thinking VTAPX or VIPIX. Would these be okay choices, and which would be preferred? Am I correct in that these funds are fully invested in TIPS and thus not subject to California income tax?
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