The Trump Accounts, which are designed to save for American children’ s futures, can be a good start. But what if your family isn’t eligible for it, or you can’t get the $1,000 deposit that jumpstarts it? Luckily, there are options you can use either alongside or in lieu of the program if your family simply doesn’t qualify.
Trump Accounts officially launched on July 4th, 2026. They’re tax-advantaged investment accounts for American children with a Social Security Number (SSN), and they’re long-term retirement accounts.
Created under the “One Big Beautiful Bill,” the Trump Savings accounts are technically an Individual Retirement Account (IRA). Once the child turns 18, the account converts into a traditional IRA.
According to TrumpAccounts.gov, all US children under 18 with a valid SSN are eligible to establish a Trump Account. Parents or legal guardians can open and manage accounts on behalf of their children, and once the kid turns 18, they get control over the funds.
To get the investment account, you must download the Trump Accounts app on either the Apple App Store or Google Play.
American children who are US citizens and born between January 1, 2025 and December 31, 2028 are eligible for a one-time $1,000 contribution from the US Department of the Treasury. It isn’t automatic on its own — a parent or guardian has to open the Trump Account and elect to receive the deposit (via IRS Form 4547) before the Treasury will fund it.
Aside from just the $1,000, custodians of the account can add up to $5,000 per year.
Quite a bit, actually. As tax-advantaged accounts, and the ability to contribute up to $5,000 per year, passive growth can add up.
With just the $1,000 deposit, assuming a conservative 7% annual return, a $1,000 deposit could grow to approximately $3,380 by age 18 without any additional contributions. Not too shabby for a contribution you didn’t have to fund.
The Trump Account are long-term retirement accounts, not specifically college education or traditional savings accounts. However, the child may be able to use the funds for things other than retirement.
Once the child turns 18, standard IRA rules kick in for the Trump Savings account. This means withdrawals from the Trump Savings account before age 59 and a half usually come with income tax plus a 10% penalty — unless they are used for specific things.
According to the Trump Account site, the IRA’s funds can be accessed without penalty when the child turns 18 for qualified expenses. A few things are listed, like education and a first home purchase. Other than qualified expenses, withdrawals would be taxed at ordinary income rates.
Additionally, kids born before 2025 don’t qualify for the federal deposit of $1,000, so parents and guardians with older kiddos will have to fund the account on their own.
See how much a child’s Trump account could grow by age 18 — and how much of it the IRS will tax when it’s eventually withdrawn.
Assumptions. Contributions are modeled at the start of each year and the return is applied after, at a constant net rate (your return minus the expense ratio). The growth period ends on Dec 31 of the year before the child turns 18; no family or employer contributions are added after that. The $5,000 annual cap is combined across family and employer contributions, and employer money is capped at $2,500. The $1,000 seed and employer contributions don’t create basis, so they’re fully taxable on withdrawal along with all growth. The cap is inflation-indexed after 2027; this tool holds it flat. Figures are estimates for illustration only and are not tax, legal or investment advice. Rules reflect IRS Notice 2025-68 and proposed regulations and may change.
As the Trump Savings account is a long-term retirement account, here are alternative and/or additional savings options for kids.
Similar to the Trump Savings account, a 529 plan is a tax-advantaged account. However, there are some major differences in how they work and what they’re made for.
529 savings plans are designed for education expenses. Contributions grow tax-free if used for qualified expenses, and many states have tax deductions or credits for 529 savings contributions. On top of all that, 529 plans have no contribution limits, unlike the Trump Account’s $5,000 yearly cap.
While earnings grow tax-free, and they are only tax-exempt if the funds are used for qualified education expenses.
Uniform Gifts to Minors Act (UGMA) accounts and Uniform Transfers to Minors Act (UTMA) are custodial brokerage accounts. UTMA and UGMA accounts allow you to invest in stocks, ETFs and other assets for your child, and then once they’re of age, they can access the account and use the funds or assets for pretty much anything they like.
UGMA accounts allow you to transfer financial assets like cash, stocks, bonds and mutual funds. Similar, but not exactly the same, UTMA accounts can hold a wider range of assets, including real estate and other property. The exact structure of these accounts can depend on your state.
For UGMA/UTMA accounts, the money can go toward pretty much anything; the funds are not limited to education or retirement. There’s no federal cap on contributions like there is with a Trump Account.
For simpler, shorter term goals, a good ol’ high-yield savings account still earns its spot.
Tons of options without monthly fees, joint ownership, full access whenever the kid might need it, and long-term growth with high rates. Many high-yield savings accounts have rates around 4% APY with no monthly fees, no contribution limits and come with the standard $250,000 federal deposit insurance.
If your teen already has a part-time job, a custodial Roth IRA could be a great option. You fund a Roth IRA with dollars that have already been taxed, and qualified withdrawals are tax-free.
Roth IRAs are ideal for those who think they’ll be in a higher income tax bracket when they retire. And if we’re talking about a working teen, there’s an extremely good chance they’ll be earning more income later on in life.
Contributions are limited to what the child/teen would actually earn, but qualified withdrawals in retirement come out completely tax free, which can beat the tax deferred (but eventually taxable) growth inside a Trump Account.
These new Trump Accounts can offer free federal money in a tax-advantaged account; but with free money there is either a catch or not everyone can get their hands on it.
Eligibility for that flagship $1,000 first contribution is narrow. And the account itself is designed for long horizon retirement savings, and only certain expenses qualify for penalty-free withdrawals.
For most families, layering is the smart move. Grab the free money if your child qualifies, or at the very least consider opening the account and depositing what you can, then consider pairing it with another savings account for any other future needs.
