A New Way to Start Saving for Your Child’s Future

Trump Accounts officially launched on July 4, 2026. Part of the One Big Beautiful Bill Act (OBBBA), these are long-term investment accounts created to help children build wealth from an early age. Here’s what parents should know.

What is a Trump Account?

A Trump Account is a new type of investment account for kids under the age of 18. It’s like a starter IRA. The child owns the account, but a parent or guardian manages it until that child turns 18. The money goes into low-cost index funds, where it is meant to sit and grow for years.

Who Can Get a Trump Account?

Any U.S. citizen under 18 with a Social Security number can have a Trump Account opened for them, but not every child gets government funding for their account.

Children born between January 1, 2025 and December 31, 2028, automatically get a one-time $1,000 seed deposit from the U.S. Treasury once the account is opened.

Opening An Account

Parents or guardians can open a Trump Account by filing IRS Form 4547 or through the online portal at TrumpAccounts.gov. The deadline to open an account is one year before your child turns 18, but if your child was born in the eligible window to receive the $1,000 federal deposit, there’s no reason to wait.

Who Can Contribute and How Much

Once the account is open, parents, grandparents, other family members, and even employers can chip in. Individuals can contribute up to $5,000 a year, and this is expected to adjust for inflation over time. Employers can contribute up to $2,500 a year on top of that, which won’t count toward the employee’s taxable income.

In addition to these deposits, three other types of deposits are also allowed:

• The $1,000 seed deposit from the U.S. Treasury discussed above
• Deposits from qualifying charities like the Dell Foundation: $250 is available for children under the age of 10 who were born before January 1, 2025, and live in zip codes with median zip codes below $150,000.
• Other charitable organizations may also contribute to eligible Trump Accounts. Each program has its own rules for who qualifies and how much it contributes. For example, Dalio Philanthropies plans to deposit $250 into eligible accounts in Connecticut. And Brad Gerstner, CEO of Altimeter Capital, has pledged an additional $250 into Trump Accounts for all Indiana children under the age of five. More organizations could launch similar programs over time.

How the Money Is Invested

Unlike a regular brokerage account, Trump accounts don’t allow you to choose individual stocks. Money is invested in low-cost mutual funds or ETFs that track a broad index of U.S. stocks, like the S&P 500. The law capped the fees at 0.10% to keep costs down. This approach is meant to be simple for long-term growth rather than short-term trading.

Taxes and Withdrawals

Family contributions are made with after-tax dollars, and the investments grow tax-deferred, meaning you typically won’t owe taxes while the money remains in the account. Taxes are usually due when the money is withdrawn.

The funds generally can’t be touched before January 1 of the year your child turns 18. There are some exceptions, like rolling over excess contributions or handling the account after a death. But for the most part, this is hands-off money until adulthood.

Once your child turns 18, the account converts to a traditional IRA, and normal IRA rules apply. That means withdrawals before age 59 ½ can trigger a 10% penalty on top of regular income tax, with the usual IRA exceptions.

How Do Trump Accounts Stack Up Against Other Options?

Trump Accounts aren’t the only option for saving for a child’s future, and they’re not automatically the best one.

• 529 Plans. These are still the strongest choice if college is the goal. Money grows tax-free, and withdrawals for qualified education expenses are also tax-free. The trade-off is a 10% penalty plus taxes on gains if you use the money for something other than education, though you can now roll some unused 529 funds into a Roth IRA under certain limits.
• UGMA/UTMA Accounts. These custodial accounts can hold any kind of asset and have no contribution limits. But they don’t offer any special tax break, and once your child reaches adulthood, they get full control of the money with no restrictions on how it’s spent.

There is no right answer here, and many families can use more than one option. It’s best to treat Trump Accounts as one more tool available for planning your child’s financial future, but not the only tool.