A brand new type of investment account for children launched on July 4, 2026 — and if you have kids or grandkids under 18, it's worth understanding quickly. Trump Accounts (officially called 530A accounts) are tax-advantaged investment accounts designed to give American children a head start on long-term financial security. Some children even qualify for a free $1,000 government deposit just for opening one.
Breaking News: Trump Accounts officially launched July 4, 2026. Contributions are now open. Children born between January 1, 2025 and December 31, 2028 may qualify for a free $1,000 government seed deposit. Open an account at trumpaccounts.gov or by filing IRS Form 4547.
What Is a Trump Account?
A Trump Account — formally known as a Section 530A IRA — is a new type of tax-deferred investment account that any parent, guardian, grandparent, or other authorized adult can open on behalf of a child under 18. Created under the One Big Beautiful Bill Act (OBBBA) of 2025, these accounts are designed specifically for long-term retirement savings, not education expenses.
Think of it as a traditional IRA that starts in childhood. The money grows tax-deferred, contributions are made with after-tax dollars, and when the child turns 18, the account converts to a standard traditional IRA — giving them decades of compounding growth before retirement.
Who Qualifies?
Eligibility is broad — almost every American child qualifies for a Trump Account:
- Any child under 18 with a valid Social Security number can have a Trump Account
- No earned income required — unlike custodial Roth IRAs, children don't need a job
- Only one account per child is allowed
- Must be opened before January 1 of the year the child turns 18
The Free $1,000 Government Deposit
Here's the most exciting part for new parents: children born between January 1, 2025 and December 31, 2028 who are U.S. citizens qualify for a one-time $1,000 seed contribution from the federal government. This money does NOT count toward the annual contribution limit.
Additionally, the Michael & Susan Dell Foundation has pledged $250 deposits for up to 25 million children age 10 or younger who live in ZIP codes with median family incomes below $150,000 — even if they were born before 2025 and don't qualify for the federal $1,000.
Free Money Rule: Even if you plan to contribute nothing beyond the seed money, open a Trump Account for any child born 2025-2028. A $1,000 investment in a broad U.S. index fund growing at 7% annually becomes approximately $14,000 by the time the child turns 18 — and much more by retirement age.
How Trump Accounts Work
Contributions
Multiple people can contribute to a child's Trump Account:
- Annual limit: $5,000 per year combined from all individual contributors (parents, grandparents, friends, family)
- Employer contributions: Up to $2,500 per year (counts toward the $5,000 limit)
- Government/charitable contributions: Do NOT count toward the $5,000 limit
- No income requirement: Anyone can contribute regardless of income
- Contributions are NOT tax-deductible during the growth period (before age 18)
- No April 15 extension: Contributions must be made within the calendar year
Investments
During the growth period (before age 18), investment options are limited to low-cost U.S. stock index funds and ETFs with an expense cap of 0.10%. No international funds, bonds, or individual stocks are permitted. This keeps costs low and ensures broad market exposure — a smart design for long-term compounding.
Withdrawals
Funds generally cannot be withdrawn before January 1 of the year the child turns 18. The only exceptions are death of the beneficiary or certain rollovers to ABLE accounts for children with qualifying disabilities. Once the child turns 18, the account converts to a traditional IRA with standard withdrawal rules — including the 10% early withdrawal penalty for distributions before age 59½.
How Trump Accounts Compare to Other Savings Options
| Feature | Trump Account | 529 Plan | Custodial Roth IRA |
|---|---|---|---|
| Purpose | Retirement savings | Education expenses | Retirement savings |
| Earned income required? | No | No | Yes |
| Annual contribution limit | $5,000 | No limit (gift tax rules apply) | $7,000 (2026) |
| Tax on contributions | After-tax (not deductible) | After-tax (state deduction varies) | After-tax (not deductible) |
| Tax on growth | Tax-deferred | Tax-free (for education) | Tax-free |
| Tax on withdrawal | Taxed as ordinary income | Tax-free (for education) | Tax-free (after 59½) |
| Free government money? | Yes — up to $1,000 | No | No |
| Access before 18? | No | Yes (for education) | Contributions only |
How to Open a Trump Account
- Go to trumpaccounts.gov or file IRS Form 4547 with your tax return
- Verify your identity through ID.me (IRS requirement)
- Submit Form 4547 to elect the account for your child
- Activate the account through the official Trump Accounts app (available on iOS and Android) once Treasury notifies you
- Begin contributing — contributions are accepted starting July 4, 2026
- The $1,000 deposit (if eligible) will be deposited by the Treasury after July 4, 2026
Important: All official communication about Trump Accounts comes via email from no-reply@trumpaccounts.treasury.gov. If you receive a phone call or text about a Trump Account, do not respond — it is likely a scam.
Should Grandparents Open One?
Grandparents can absolutely contribute to a Trump Account — they just can't open one themselves. The account must be opened by a parent or legal guardian first, then grandparents and other family members can contribute up to the combined $5,000 annual limit.
For grandparents thinking about legacy and estate planning, Trump Accounts offer a simple, structured way to give grandchildren a meaningful financial head start — especially for newborns eligible for the government's $1,000 match.
Key Limitations to Know
- Tax treatment is less favorable than a Roth: Withdrawals are taxed as ordinary income — unlike a Roth IRA where qualified withdrawals are tax-free. If your child has earned income, a custodial Roth IRA is often the better long-term choice.
- Financial aid impact: Student-owned assets (which Trump Accounts become at 18) can affect college financial aid eligibility more than parent-owned assets.
- Limited investment options: U.S. index funds only — no international diversification during the growth period.
- Low contribution limit: $5,000/year is less than other savings vehicles, limiting how much you can shelter.
The Power of Starting Early
The real magic of Trump Accounts is time. Consider what happens to a $1,000 government deposit invested in a broad U.S. index fund averaging 7% annual returns:
| Starting Amount | Annual Contribution | Value at Age 18 | Value at Age 65* |
|---|---|---|---|
| $1,000 (seed only) | $0 | ~$3,380 | ~$68,000 |
| $1,000 (seed) | $1,000/year | ~$21,000 | ~$420,000 |
| $1,000 (seed) | $5,000/year | ~$95,000 | ~$1.9M |
*Assumes 7% annual return, contributions from birth to age 18, then no additional contributions
Run Your Own Retirement NumbersThe Bottom Line
Trump Accounts are a genuinely new and worthwhile tool — especially for children born 2025-2028 who qualify for the free $1,000 government deposit. Even if you can't contribute a penny beyond that, opening an account and claiming the seed money is a no-brainer. For families who can contribute regularly, the long-term compounding potential is significant.
That said, Trump Accounts aren't automatically better than 529 plans (if education savings is your goal) or custodial Roth IRAs (if your child has earned income). Think about what you're saving for and use the right tool — or a combination of tools — for your family's situation.