Trump Accounts Explained: How Every Child Can Receive $1,000 at Birth Through New Federal Savings Program

Trump Accounts represent a novel savings initiative established under President Trump's tax and spending legislation. This program aims to provide each newborn American child with financial momentum from birth.

Under this new federal program within President Trump's tax law, every child born during his administration will receive a financial jumpstart. Parents who establish a "Trump Account" for their newborn will be granted $1,000, which will be invested in the stock market until the child reaches 18 years of age. While parents of older children can also create accounts, they won't qualify for the initial $1,000 contribution.

The $1,000 bonus is exclusively available to babies born during Trump's presidential term.

Trump Accounts have been introduced as an innovative approach to provide American children with a stronger financial foundation. Made possible through President Trump's Working Families Tax Cuts, eligible children born between 2025 and 2028 can receive a $1,000 contribution from the U.S. government to begin their financial journey.

What exactly are Trump Accounts? They constitute a new savings program created under Trump's tax and spending legislation, designed to give every American child a financial advantage by investing funds in the stock market on their behalf.

Regarding eligibility, any child under 18 who possesses a Social Security number qualifies for a Trump Account. Specifically, newborns arriving between January 1, 2025, and December 31, 2028, will receive a $1,000 contribution from the U.S. Treasury if their parents establish an account. While older children can have accounts established for them, they will not receive the $1,000 initial deposit.

The operational structure of Trump Accounts involves parents or guardians opening and managing these accounts. Private financial institutions and brokerages will invest the money in low-cost U.S. stock index funds. Parents can contribute up to $2,500 annually pretax, while family members, friends, employers, and local governments can contribute up to $5,000 per year. Notably, contributions from charitable organizations and certain government entities have no imposed limit.

Philanthropists Michael and Susan Dell have pledged $6.25 billion to assist children under 10 residing in lower-income ZIP codes (with median household incomes below $150,000). Each qualifying child is expected to receive approximately $250.

Regarding access to these funds, children can only withdraw money after turning 18. Withdrawals will be subject to taxation and may incur penalties, similar to retirement accounts. However, exceptions exist for specific purposes such as higher education expenses or purchasing a first home.

It's important to note certain limitations of Trump Accounts. These accounts won't address immediate needs like food, childcare, or healthcare. Additionally, children in some immigrant families may be excluded from receiving the $1,000 seed money. The accounts will officially open for contributions on July 4, 2026, though parents can begin the registration process through IRS Form 4547 before that date.