More than 6 million children were already registered for a brand-new federal investment program before its official launch date even arrived, according to a senior Treasury official.(1) For a program that didn’t exist a year ago, that’s a striking head start — and it says something about how aggressively the federal government is pushing families toward the stock market, rather than a savings account, as the default way to build wealth for kids.
That program is the Trump Account, and as of July 2026, it’s live nationwide.
What is a Trump Account?
A Trump Account is a tax-advantaged investment account for children under 18, created under a provision of the One Big Beautiful Bill Act (OBBBA). Officially known as a Section 530A account, it functions like a custodial-style traditional individual retirement account (IRA): the child owns the account, but a parent or guardian administers it until the child turns 18.(2)
Unlike a typical kids’ savings account, the money in a Trump Account isn’t sitting in cash. By law, contributions can only go into low-cost mutual funds or exchange-traded funds (ETFs) that track a broad index of primarily US stocks — at least 90% US companies — and the fund’s expense ratio can’t exceed 0.1%.(3) That makes it closer to a retirement account than a rainy-day fund, with all the market risk that comes with it.
How Trump Accounts work
The $1,000 government seed deposit
Children born between January 1, 2025, and December 31, 2028, who are US citizens with a valid Social Security number are eligible for a one-time $1,000 deposit from the Treasury Department once a parent or guardian opens an account on their behalf.(4)
The $250 Dell Foundation grant
Kids born before 2025 don’t qualify for the government’s $1,000 seed, but the Michael and Susan Dell Foundation has pledged $6.25 billion to add $250 to accounts for up to 25 million children age 10 and under who live in ZIP codes with median incomes of $150,000 or less.(4) Several other companies and philanthropists, including Micron and the Dalio family, have made similar targeted pledges in specific states.
Contribution limits
Total contributions from all sources — parents, grandparents, friends and employers — are capped at $5,000 a year per child, a limit that’s indexed to inflation starting after 2027. Up to $2,500 of that annual limit can come from an employer.(1) Neither the government’s $1,000 seed nor charitable and philanthropic gifts count against that cap.
Where the money is invested
At launch, the Treasury designated the State Street SPDR Portfolio S&P 500 ETF (SPYM) as the default investment. Four additional funds have since been approved: the iShares Core S&P 500 ETF (IVV), the Vanguard Total Stock Market ETF (VTI), the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM) and the iShares Core S&P Total US Stock Market ETF (ITOT).(5) The ability for families to actively choose among these funds is still being rolled out by the Treasury.(6)
Vanguard’s chief investment officer for global equity has noted one quirk worth flagging: unlike a 529 plan, which typically shifts to a more conservative mix as a child gets older, a Trump Account stays 100% invested in equities the entire time, with no built-in glide path toward safer assets.(5)
Who’s eligible and how to open a Trump Account
Any child under 18 with a valid Social Security number can have a Trump Account opened on their behalf, regardless of family income. A parent, legal guardian, adult sibling or grandparent can serve as the authorized individual who opens and manages the account.(4)
To open one:
File IRS Form 4547 through your IRS account at IRS.gov or through the official portal at TrumpAccounts.gov.(2)
Once the IRS activates the election, the account is initially held by the Treasury, with Bank of New York Mellon serving as financial agent and Robinhood as the initial broker.(4)
Families can later roll the account over to a private brokerage. Vanguard and Fidelity have already announced rollover capability, and other major brokerages are expected to follow.(6)
There’s a limit of one Trump Account per child.
What happens when your child turns 18
Money in a Trump Account is generally inaccessible during what the program calls the “growth period” — the years before the child turns 18.(7) On January 1 of the year the child turns 18, the account automatically converts into a traditional IRA, and the child becomes the account owner.(7)
From that point, standard traditional IRA rules apply: withdrawals before age 59 1/2 are generally taxed as ordinary income and hit with a 10% early withdrawal penalty, though exceptions exist for situations like a first-time home purchase or qualified higher education expenses.(4) It’s worth noting that some of this guidance could still evolve — a Fidelity retirement executive has said the rules may ultimately restrict withdrawals to strictly after a child’s 18th birthday, since a minor doesn’t hold the same legal rights as an adult.(3)
Trump Account vs. other ways to save for a child
A Trump Account isn’t the only option for building wealth on behalf of a child, and it isn’t automatically the best one for every goal. Here’s how it stacks up against the alternatives families already use, including a custodial Roth IRA.
18-21, depending on state; contributions withdrawable anytime(9)
18-21, depending on state; child gains full control
Notable flexibility
Unused 529 funds can’t roll in; unused Trump Account funds have no rollover path yet
Up to $35,000 can roll into the beneficiary’s Roth IRA if unused(8)
Contributions (not earnings) withdrawable tax and penalty-free anytime(9)
No penalty for non-education use, but child controls funds at majority
If you’re weighing a Trump Account against a robo-advisor-managed custodial account instead, it’s worth comparing best robo-advisors alongside this table.
Bottom line
A Trump Account gives every eligible child a stake in the stock market from birth, with a government-funded head start that a 529 plan or custodial brokerage account can’t match. But the tradeoff is real: the money is locked up for nearly two decades, restricted to a narrow set of index funds and, once your child turns 18, it plays by the same rules as any other IRA. For most families, the account is likely to work best as one piece of a broader plan rather than a replacement for existing investment apps or education accounts.
Compare custodial investment accounts
See which brokerages offer the best custodial Roth IRA and investment account options for kids.
Yes. Any child under 18 with a Social Security number is eligible for a Trump Account, but only children born between January 1, 2025, and December 31, 2028, qualify for the $1,000 government seed deposit. Children born before 2025 may still qualify for the $250 Dell Foundation grant if they're 10 or younger and live in an eligible ZIP code.
No. Robinhood is the initial broker for accounts opened directly through the Treasury, but families can roll the account over to another approved trustee, such as Fidelity or Vanguard, once that functionality becomes available.
No. Trump Account funds are invested in the stock market through index funds, which means the balance can fall as well as rise. As with any investment account, capital is at risk, and past market performance doesn't guarantee future returns.
Yes. There's nothing preventing a family from funding both a Trump Account and a 529 plan, or a custodial Roth IRA, for the same child, subject to each account's own contribution rules.
Sources
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Matt Miczulski is an investments editor and market analyst at Finder. With over 450 bylines, Matt dissects and reviews brokers and investing platforms to expose perks and pain points, explores investment products and concepts and covers market news, making investing more accessible and helping readers to make informed financial decisions.
Before joining Finder in 2021, Matt covered everything from finance news and banking to debt and travel for FinanceBuzz. His expertise and analysis on investing and other financial topics has been featured on Yahoo Finance, CBS, MSN, Best Company and Consolidated Credit, among others. Matt holds a BA in history from William Paterson University.
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