Millions of American parents are rushing to open the new Trump Accounts, a federal savings program designed to give children a financial head start from birth. Under the One Big Beautiful Bill Act (OBBBA), children born between 2025 and 2028 will automatically receive a $1,000 government deposit into these accounts, with families allowed to contribute up to $5,000 annually.

The funds remain locked until the child turns 18, when they can be used for college, housing, starting a business, or other investments.

Parents of children born between 2025 and 2028 should consider opening a Trump Account to secure the one-time $1,000 deposit, while families with older children or limited resources should weigh alternatives like 529 plans, Roth IRAs (if eligible), or custodial accounts based on their financial goals and capacity.


Financial adviser Max Gifford says the funds can later support college, housing, or a business, and companies like Wells Fargo have pledged to match the initial deposit for employees’ children.

Eligibility criteria

Before establishing a Trump Account, parents need to confirm that their child qualifies as an eligible individual, as defined by the program’s rules.

According to Eisneramper website, a child is eligible for a Trump Account only if they meet all of the following conditions:

• They are a US citizen with a valid Social Security Number (SSN).
  
• They have at least one parent or legal guardian who also has an SSN.
  
• They will not turn 18 in the year the account is opened.
  
• They are not already listed as a beneficiary of another Trump Account.
  

If a child qualifies, a parent can open a Trump Account via Form 4547, or the Treasury Secretary can do so on their behalf, with the account managed by the US Treasury.

Important things to note

Contributions to a Trump Account are after-tax and limited to $5,000 per year per child. But the contributions grow tax-free until withdrawals are made.

Parents can establish an account starting January 1, 2026, but contributions cannot begin before July 4, 2026.

Contributions must be invested in a US equity mutual fund or ETF tracking a qualified index, with annual fees no higher than 0.1 percent.

Employers can contribute up to $2,500 per year to an employee’s child’s Trump Account, reducing the employee’s contribution limit, with contributions tax-deductible for the employer and excluded from the employee’s taxable income.

Special contributions, such as those from eligible foundations or charities under 170(c)(1) or 501(c)(3), do not count toward the $5,000 annual limit. These contributions must be directed to all Trump Account holders, children born in a specific year or range of years, or account holders in a geographic area with at least 5,000 participants.

Trump Account funds cannot be withdrawn until the beneficiary turns 18. After that, distributions are treated like a traditional IRA, with part taxable at ordinary income rates and part nontaxable based on the beneficiary’s basis. Withdrawals made before age 59½ are subject to a 10 percent excise tax.

Other alternatives

Trump Accounts are one savings option for children, alongside alternatives such as 529 plans, Roth IRAs (if eligible), and custodial accounts, each offering its own advantages and limitations.