Updated February 2026

The federal government is launching a brand-new savings and investment program for children known widely as Trump Accounts and officially created under the Working Families Tax Cuts Act signed into law in 2025. These accounts are designed to help families build long-term savings for their children’s futures and many will have heard about the potential for the special $1,000 seed money for eligible kids born between 2025 and 2028. Below, we break down everything you need to know.

What are Trump Accounts?

Trump Accounts are a new type of tax-advantaged investment account established specifically for minors. They resemble traditional individual retirement accounts (IRAs) but are tailored for children, with potential initial seed money and a focus on long-term, tax-deferred stock-market investing.

• They are custodial accounts owned by the child and managed by a parent or guardian until age 18.
• Funds must be invested in low-cost index mutual funds or exchange-traded funds (ETFs).
• Withdrawals are generally not allowed until the child turns 18.

Who qualifies for a Trump Account?

To be eligible:

• The child must be a U.S. citizen with a valid Social Security number.
• The account can be established for any child under age 18, but only children born between January 1, 2025 and December 31, 2028 qualify for the one-time $1,000 government seed contribution.
• Younger children born before 2025 may still be able to open a Trump Account, but without the initial $1,000 federal contribution. External charitable contributions may also be available in some cases.

How much money is put into a Trump Account?

• The U.S. government will contribute a one-time $1,000 seed contribution for each eligible child in the 2025–2028 birth window.
• Families and others (parents, relatives, friends) can contribute up to $5,000 per year.
• Employers can contribute up to $2,500 per year on behalf of an employee’s child; this counts toward the $5,000 cap.
• Charitable organizations or government entities may make additional contributions that do not count toward the $5,000 limit if made broadly (e.g., to all children in a class).

When do Trump Accounts start?

Trump Accounts are scheduled to launch on July 5, 2026, with contributions and new account openings becoming available at that time. Families must make an account election before the account is established and funded. Families can open the account by filing Form 4547 when they file their taxes or by completing the form through the online portal.

How do Trump Accounts grow?

Funds in a Trump Account are invested in broad U.S. equity index funds meaning your child’s money is tied to overall stock-market performance. (It doesn’t appear that faith-based funds will be available at this time.)

• Investment fees are capped at 0.10% annually.
• Because earnings grow tax-deferred, the money can compound over many years.

When can the money be used, and for what?

• Generally, funds are not accessible until age 18.
• After 18, the accounts operate like a traditional IRA: withdrawals are taxed as ordinary income and may carry early-withdrawal penalties unless used for certain qualified purposes.
• At age 18, various options may also be possible like rolling over to a traditional IRA account or doing a Roth conversion.

How are Trump Accounts different from other savings tools?

Trump Accounts are a new way to start investing for kids, but they don’t necessarily replace other accounts they could be viewed as a complementary account.

Should you consider opening a Trump account for your child?

We remain skeptical as to whether these accounts will emerge as a significant long-term planning tool for families given the low contribution limits, limited investment options, and advantages of other types of accounts.

Opening a Trump account simply for the $1,000 could be worth it. However, in most situations, 529 plans and/or custodial accounts (UGMA/UTMA) are likely to remain the most impactful accounts for minors.

A potential opportunity with Trump accounts arises when considering converting funds in the account to Roth. When the qualifying child reaches the age of 18 and gains control of the account, they could consider converting all or a portion to a Roth IRA. This could be prudent given the child is likely to be in his or her early working years and therefore in a lower tax bracket. This would likely allow for significant tax-free growth over time and result in a sizable account as the owner enters retirement.

Bottom Line

Trump Accounts are a brand-new federally created savings vehicle intended to give children a head start on building long-term financial security through tax-deferred investing.

If you have a child born within the birthdate window, you can get a free $1,000 deposit for the account, that’s hard to pass up even if you don’t put in any other contributions.

As always, you should consult with your advisor to determine whether a Trump account is suitable for your situation.

Wondering if a Trump Account fits into your family’s financial plan, we’re happy to take a look together and see if it makes sense. Give us call!

More information

Trump Accounts | Internal Revenue Service

Trump Accounts – Jumpstarting the American Dream