The “Trump Accounts” program, launched under the Working Families Tax Cuts package, is a new tax-advantaged savings and investment initiative designed specifically for American children under 18. The official slogan framing the initiative is “Trump Accounts jumpstart the American Dream.”
Thank you for reading this post, don't forget to subscribe!The program blends elements of “baby bonds” (government-funded savings accounts for children) with private investing, relying heavily on long-term compound growth.
Core Features of Trump Accounts
- The Federal Seed ($1,000): As part of an initial pilot program, the U.S. Treasury provides a one-time $1,000 deposit for eligible U.S. citizen children born between January 1, 2025, and December 31, 2028.
- Private & Philanthropic Contributions: Parents, grandparents, relatives, or friends can contribute up to $5,000 per year per child using after-tax dollars. Furthermore, private donors and corporations can pitch in—notably, the Dell family pledged a massive $6.25 billion donation to bolster accounts for millions of low- and middle-income children.
- Strict Investment Guidelines: To prevent high-risk speculation, the funds must be placed in low-cost mutual funds or exchange-traded funds (ETFs) that track broad U.S. equity indexes (like the S&P 500). Expense ratios are strictly capped at 0.1%.
- The Timeline: Funds undergo a mandatory “growth period” and generally cannot be touched until January 1 of the year the child turns 18. At that point, full control transfers to the beneficiary. The account then functions much like a Traditional IRA, where funds can continue to grow tax-deferred or be withdrawn (though standard retirement withdrawal/tax rules apply after age 18).
How to Open an Account
Families apply by filing IRS Form 4547 (either alongside their annual tax returns or after a child is born). Following verification via ID.me through the IRS, accounts are managed through the official portal at trumpaccounts.gov, with family contributions scheduled to officially open on July 4, 2026.
