Trump Accounts have officially launched in the United States. For any government, encouraging young people to save money is an important step, and that’s exactly what the Trump administration is doing. Trump Accounts aim to build savings and investment habits in children from a young age. Canada and France also run government-regulated savings accounts for children.
How Trump Accounts Work
The newly launched Trump Accounts allow for an initial one-time deposit from the US Treasury, with optional annual contributions from parents. The US government makes a one-time $1,000 contribution for every eligible child. This is a single payment only; the government will not contribute every year.
No regular contributions from parents are required; the account can still grow with just the government’s initial investment, even if no one else contributes. The maximum annual contribution to a Trump Account is $5,000 per child, and this money can come from parents, family members, friends, or employers.
To be eligible, children must meet three criteria: they must be born between January 1, 2025, and December 31, 2028, be US citizens, and have a valid Social Security number.
Parents or legal guardians are responsible for opening and managing the account, which is set up in the child’s name. The parent or guardian acts as the sole custodian until the child turns 18.
A Trump Account is a tax-deferred investment account created for children under 18, designed to build long-term wealth for them.
Once the child turns 18, the account belongs entirely to them, and they can invest or withdraw the funds right away. If they choose not to withdraw, the account automatically converts into a traditional IRA.
Generally, funds from a Trump account cannot be withdrawn before age 18, with limited exceptions like rollovers, death distributions, and excess contributions per IRS rules. After age 18, standard traditional IRA rules apply, imposing income taxes and a 10% penalty on withdrawals before age 59½, though exceptions exist for higher education expenses and first home purchases.
Where the Money Is Invested
At launch, all contributions to Trump Accounts will be invested in the State Street SPDR Portfolio S&P 500 ETF (SPYM), a low-cost ETF that tracks the S&P 500 Index. The annual fee is capped at 0.10%.
In the coming months, parents are likely to get more low-cost index ETF options, including the iShares Core S&P 500 ETF (IVV), Vanguard Total Stock Market ETF (VTI), State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and iShares Core S&P Total US Stock Market ETF (ITOT).
How Much It Could Grow
TrumpAccounts.gov estimates that an account could reach $6,000 by age 18, $15,000 by age 27, and $243,000 by age 55 with a $1,000 Treasury deposit and no further contributions. If an additional $5,000 is contributed each year, the account could grow to $271,000 by age 18, $742,000 by age 27, and $13 million by age 55.
According to the Treasury’s Office of Tax Analysis, if an account is fully funded every year and left untouched, it could grow to as much as $1.9 million by the time the child turns 28.
The Trump Accounts App
The US Department of the Treasury released the Trump Accounts app on July 4. It’s now available nationwide and lets parents and children safely access their account, view their money in real time, and make contributions right from their phone or tablet.
The app’s new dashboards give a clear view of balances, contributions, and investment performance, so families can easily track their child’s progress. It also comes with helpful features for parents, such as setting up recurring contributions, linking bank accounts, and getting personalized guidance on building their child’s financial future.
Where Things Stand Now
As of July 2, over 6 million families have created Trump Accounts, making them eligible to receive up to $5,000 a year from various contributors, with an inflation adjustment starting in 2028. More than 50 companies have also pledged to contribute to their employees’ children’s accounts.
On Monday, July 6, President Trump will meet with officials from the NYSE and Nasdaq to formally announce these new investment accounts for children, with the launch taking place in the Oval Office before the White House Press Pool.
National Economic Council Director Kevin Hassett announced that NYSE and Nasdaq officials will ring their opening bells from the White House, marking the occasion, with trading hours running from 9:30 a.m. to 4 p.m. EDT.
Disclaimer: This article is for informational purposes only and should not be construed as investment, tax, or financial advice. Projected investment values are based on assumptions published by the U.S. Treasury and are not guaranteed. Actual investment returns will vary depending on market performance and other factors. Past performance is not indicative of future results. Investors should evaluate their own financial circumstances or consult a qualified financial adviser before making investment decisions.