The Trump Accounts, a new federal savings and investment program for children, went live on July 4, providing American families a new way to save for their children’s financial future,
More than 6 million accounts opened for children under 18 as part of the One Big Beautiful Bill Act, signed into law recently.
Known as Trump Accounts, they function similarly to traditional IRAs, enabling money to grow tax-deferred until the child achieves the age of 18.
These accounts are put into low-cost index funds, with the State Street SPDR Portfolio S&P 500 ETF (SPYM) being the default fund. The parents will be able to choose from four other funds after that, which include those from BlackRock and Vanguard.
Children born between January 1, 2025, and December 31, 2028, are eligible to receive a one-time $1,000 contribution from the federal government. Out of the 6 million accounts that have been established thus far, 1.4 million have received this contribution on a pilot basis.
Family members, friends, and employers all can contribute to these accounts, with an annual limit of $5,000.
These accounts are hosted at Robinhood, with an app developed by the platform and Bank of New York to assist families in tracking their investments. As per the Social Security Administration, parents of newborns will also be able to enrol their babies in Trump Accounts at the hospital soon during the Social Security number registration process.
At age 18, the account is changed into a conventional IRA. Any withdrawals made before the person is 59½ years old may be subject to a 10 per cent tax, but there are some exceptions such as college expenses, first-time home-buyer expenses (up to $10,000), and other expenses.
2026-07-04 22:03:00
