Trump Accounts are now available to families in the United States. Starting July 4 — a date chosen by the Donald Trump administration to coincide with the celebrations marking the 250th anniversary of the country’s independence — parents and guardians can open these new investment accounts for minors, a program that includes an initial deposit of $1,000 for millions of babies who meet certain requirements.
The program was created by the tax and spending bill known as the One Big Beautiful Act. “Think about it: children born with no money—absolutely no money—can become very wealthy by the time they turn 18,” Trump said on Monday. However, critics of the initiative argue that its benefits will primarily favor families who can afford to make additional contributions over several years.
What Are Trump Accounts?
Trump Accounts — also known as 530A accounts — are tax-advantaged investment accounts designed for children under 18. During childhood, the money remains invested in index funds linked to the U.S. stock market and grows on a tax-deferred basis.
The idea is for children to start building wealth at a young age so that, upon reaching the age of majority, they can use those funds for specific goals such as paying for college, buying a home, or starting a business.
Once the beneficiary turns 18, the account operates under rules similar to those of a traditional IRA, so it can also be maintained as a retirement savings vehicle.
Who is eligible to receive the $1,000?
Not all minors automatically receive the government payment. To be eligible for the initial $1,000 deposit, the child must:
- Have been born between January 1, 2025, and December 31, 2028.
- Be a U.S. citizen.
- Have a valid Social Security number.
Minors under 18 who do not meet these requirements can also open a Trump Account, although they will not receive the government deposit.
Treasury Secretary Scott Bessent stated on Monday that 6 million U.S. children have enrolled so far, 86% of whom come from families with incomes below $200,000.
Under the program, parents can open the account regardless of their immigration status, provided the child meets the established requirements.
How does the account work?
Once opened, the money is automatically invested in low-cost index funds that track the performance of the U.S. stock market, such as the S&P 500 index. During this phase, investments can only be made in funds with very low fees.
The accounts are initially managed by Bank of New York Mellon, while families can check their balance and returns using the official app or through the government-sponsored portal.
Parents, guardians, grandparents, older siblings, employers, and other relatives can make contributions to the account.
How much money can be deposited?
The general limit is $5,000 per child each year, not including the initial $1,000 deposit made by the government.
Within that limit, employers can contribute up to $2,500 annually, an amount that counts toward the $5,000 cap. Charitable organizations and state or local governments may also make contributions, which in some cases do not count toward that annual limit.
Several companies and philanthropists have already announced programs to supplement children’s savings. Among them are Michael and Susan Dell, as well as companies such as Dell Technologies, Bank of America, JPMorgan Chase, Micron Technology, Nvidia, Intel, IBM, and Uber.
When can the money be withdrawn?
Under normal circumstances, funds cannot be withdrawn before the beneficiary turns 18. After that, the money can remain invested or be used for eligible expenses, such as higher education, the purchase of a first home, or starting a business.
If the money is used for other purposes before the age specified for a traditional IRA, the beneficiary may face taxes and an additional 10% penalty, except in certain cases provided for by law.
Criticism
For many experts, the program’s main appeal is the free $1,000 deposit, as it provides seed money that can grow over the years through compound interest.
However, financial experts point out that Trump Accounts are not a substitute for other savings tools, such as 529 education plans, which offer more favorable tax treatment for paying for education and greater flexibility in investments.
Other experts point out a possible additional benefit: since the account converts to a traditional IRA when the beneficiary turns 18, there is the option to later convert those funds into a Roth IRA, which—under certain tax conditions—would allow future earnings to grow tax-free.
At the same time, economists and research centers caution that the program’s impact will depend largely on each family’s ability to continue making contributions. They argue that higher-income households will be better able to take advantage of these accounts’ growth potential, while lower-income families will likely benefit only from the government’s initial contribution.
