What Are Trump Savings Accounts and Should You Open One for Your Child?

If you’ve heard news about something called a Trump Account (yes, that’s really what it's called), you’re not alone. These new child-focused investment accounts were introduced as part of the recently passed One Big Beautiful Bill, and they’ve sparked curiosity, confusion, and a bit of political eye-rolling. 

Politics aside, the accounts themselves are real. And if you’re expecting a child between now and 2028, they might be worth understanding. 

Let’s take a closer look at what these accounts actually are, how they work, and whether they’re a good fit for your family. 

First, What Is a Trump Account? 

Under the new law, certain children born between 2025 and 2028 will be eligible for a tax-advantaged investment account seeded with $1,000 in federal funds. 

Here’s a quick overview: 

• Eligibility. Child must be born between Jan 1, 2025 – Dec 31, 2028 and have a Social Security number 

• Opening timeline. Accounts can’t be opened before July 4, 2026 

• Federal seed money. A one-time $1,000 deposit when the account is opened 

• Annual contributions. Up to $5,000/year, from parents, relatives, or even employers 

• Investment structure. Funds go into a diversified U.S. stock index fund 

• Tax treatment. Growth is tax-deferred (like a traditional IRA) 

• Ownership. At age 18, the account becomes the child’s — and distibution rules are similar to that of a traditional IRA with some important exceptions (including paying for college tuition) 

If parents don’t open one, the government may do it automatically. 

So What’s the Catch? 

While the idea of free money and long-term investing sounds great, there are a few caveats that make financial planners (and some parents) raise an eyebrow. 

• The investment options are fixed and you can’t choose your own funds 

• Withdrawals before age 59½ are limited, unless used for specific purposes like first-time home purchases, higher education, adoption of a first child, and some emergency expenses. 

• There are uncertainties around how these accounts may impact college aid or public benefits eligibility 

And while the political branding may feel like a distraction, the policy itself raises valid questions: Is this a helpful new tool? A symbolic gesture? A long-term shift in how we think about retirement and savings? Time will tell. 

Is It Worth It? 

For high-income families who are already maxing out 529 plans, IRAs, or custodial accounts, this might be a useful supplement. It’s a chance to set aside money for your child in a structured, long-term account with some tax advantages. 

But for many families, a 529 plan or custodial brokerage may offer more flexibility —especially when the goal is to save for college or offer funds that can be used earlier in life. 

As with most things in personal finance, it’s less about whether the account is good or bad, and more about whether it fits into your overall strategy. 

Our Take 

We’re watching these accounts with interest and healthy skepticism. They’re not available just yet (the earliest opening date is July 4, 2026), so there’s time to learn more and weigh your options. 

If you have a child born during the eligibility window, or you’re planning to expand your family in the next few years, this is something to keep on your radar. It could be a small but meaningful building block in your child’s financial future — or not. Either way, you deserve straightforward, hype-free information so you can make the right call for your family. 

And that’s what we’re here for. If you want help making sense of new programs like this or choosing the right long-term savings approach for your kids, let’s talk.