A new federal programme under US President Donald Trump's tax law aims to give every newborn a financial boost. Parents who open a “Trump Account” for their child will receive $1,000, which is invested in the stock market and can be accessed when the child turns 18. Parents of older children can also open accounts, but they won't receive the $1,000 bonus.
The $1,000 bonus applies only to babies born during the Trump administration.
What Are Trump Accounts?
Trump Accounts are a new savings programme created under Trump's tax and spending law. They aim to give every child in the US a financial head start by investing money in the stock market on their behalf.
Who Is Eligible For A Trump Account?
- Any child under 18 with a Social Security number is eligible.
- Newborns between January 1, 2025, and December 31, 2028, get a $1,000 contribution from the US Treasury if a parent opens an account.
- Older children can have accounts, but they won't receive the $1,000 bonus.
How Will Trump Accounts Work?
- Parents or guardians open and manage the accounts.
- Private banks and brokerages invest the money in low-cost US stock index funds.
- Parents can contribute up to $2,500 per year pretax, while family members, friends, employers, and local governments can pitch in up to $5,000 per year. Contributions from charities and some government entities have no limit.
Billionaires Michael and Susan Dell pledged $6.25 billion to help children under 10 in lower-income ZIP codes (median household income below $150,000). Each qualifying child is set to receive about $250.
When Can Kids Access The Money?
- Children can withdraw funds only after turning 18.
- Withdrawals are taxed and may face penalties, similar to retirement accounts.
- Exceptions exist for specific purposes, like higher education or a first home purchase.
Limitations Of Trump Accounts Money
- The accounts won't help with immediate needs like food, childcare, or healthcare.
- Children in some immigrant families may be excluded from the $1,000 seed money.
Accounts officially open for contributions on July 4, 2026. Parents can start signing up through IRS Form 4547 before then.
