Trump Child Savings Accounts are tax-deferred savings vehicles for children under 18. They were introduced by the One Big Beautiful Bill Act (OBBBA) in 2025.
Opening an account for your child can give them a financial head start. This goes hand in hand with planning for your own retirement and long-term financial security.
This article will take you through the basics of Trump Accounts, how they work, and how your family may benefit.
What Is a Trump Child Savings Account?
Trump Accounts for child savings (also called 530A accounts) work much like IRAs (individual retirement accounts).
Once the child turns 18, they may make penalty-free withdrawals for education and other qualified expenses. For other withdrawals, rules for traditional IRAs apply.
Why Were Trump Child Savings Accounts Created?
Trump Child Savings Accounts were created to give children a financial jumpstart.
Notably, Trump Accounts were not meant to replace 529 Plans or other tax-advantaged accounts. A child’s Trump Account is designed to give them greater financial security and prosperity in the future.
How Trump Child Savings Accounts Work
Trump Child Savings Accounts are an all-new type of investment. Here’s a look at how they work:
Who Is Eligible to Open or Receive an Account?
You may open a Trump Account on your child’s behalf if the following requirements are met:
- Your child is a U.S. citizen
- They have a Social Security number
- They are under 18 years old on December 31 of the year you opened the account
Although multiple parties may contribute to a Trump Account, only a parent or guardian may open an account.
How Money Is Added to the Account
Trump Accounts are eventually converted to IRAs, but annual contribution rules are different:
- Contributors are not required to have earned income
- Contributions aren’t limited by income
The annual contribution limit is $5,000. Funding may come from parents, family members, friends, employers, and even non-profit organizations.
The federal government’s pilot program has promised to contribute $1,000 in seed money to each Trump Account opened for children born in 2025, 2026, 2027, and 2028.
Most contributions are made with after-tax dollars. However, contributions from the government, employers, and charitable organizations are usually pre-tax.
How Funds May Be Invested
Money in your child’s Trump Account may only be invested in ETFs or mutual funds tracking the S&P 500 or other index funds. At least 90% must be invested in U.S.-based companies.
Basic Rules Around Using or Withdrawing the Money
Withdrawals or rollovers are generally not allowed before the child turns 18. There are limited exceptions:
- Funds may be rolled into another Trump Account
- Funds may be rolled into an ABLE (Achieving a Better Life Experience) account for a disabled child
- Funds may be withdrawn if the beneficiary dies
Once the child turns 18, funds may be withdrawn penalty-free for qualified expenses like these:
- First-time home purchases
- Education
- Starting a business
Full distributions are allowed once the beneficiary turns 59 1/2. Non-qualified withdrawals before 59 1/2 carry a 10% penalty.
Taxation of withdrawals can be confusing because different contributions have different tax treatments. Any after-tax contributions that are later withdrawn are tax-free.
When pre-tax contributions and investment earnings are withdrawn, they will usually be taxed at the beneficiary’s ordinary income tax rate.
Potential Benefits for Families
These are some of the ways your eligible children and your family as a whole may benefit from Trump Accounts:
Paying for Important Expenses
Your child’s Trump Account may help pay for education, purchasing a home, and other major expenses.
Encouraging Long-Term Savings
Your child will see that smart investing can pay off in the long term.
Introducing Financial Concepts Early in Life
Your child’s Trump Account gives you the opportunity to discuss investing, interest, saving, and other foundational financial concepts that will serve them well for the rest of their life.
Common Questions and Concerns
Many families are just learning about Trump Accounts. These are some common questions:
Who Benefits Most From These Accounts?
Trump Accounts were designed to benefit every American child. However, many economists believe that wealthy families who have maxed out 529 plans and other savings vehicles will see the greatest benefit.
Are Trump Accounts Fair and Accessible?
The $1,000 seed money contribution is available to every account holder. However, for low-income families who struggle with day-to-day costs, a Trump Account contribution may be less useful than direct aid.
Do Trump Accounts Affect or Interact With Other Child Savings Programs?
Trump Accounts don’t interfere with contributions to other savings vehicles. For example, if a teenager has a job and a Roth IRA, they may max out their Roth IRA even if their parents contribute the maximum amount to their Trump Account.
How Trump Child Savings Accounts Compare to Other Child Savings Options
Trump Accounts aren’t your only option when it comes to saving for your child’s future. Here’s how they stack up against other kinds of accounts:
Trump Child Savings Accounts vs. 529 College Savings Plans
529 Plans cover college tuition and other educational expenses. Because qualified withdrawals are tax-free, 529 Plans are generally better for dedicated educational savings.
Because Trump Accounts offer more flexible withdrawal options, many parents choose to open both a 529 Plan and a Trump Account.
Trump Child Savings Accounts vs. Coverdell ESAs
A Coverdell Education Savings Account (ESA) has a $2,000/year contribution limit, but high-income contributors may have lower limits or be disallowed from contributing altogether.
Coverdell ESAs have more flexible investment options. Like 529 Plans, they allow tax-free withdrawals for qualifying educational expenses. Unlike 529 Plans, contributions to a Coverdell ESA are not tax-deductible.
Trump Child Savings Accounts vs. Traditional Savings Accounts
Traditional savings accounts earn interest over time. The interest rate is set by the bank, but generally, funds in these accounts grow more slowly than funds in investment accounts. However, withdrawing funds from a traditional savings account comes with far fewer restrictions.
How to Open a Trump Child Savings Account
If you’re wondering, “How to set up a Trump Account for my child?” you’re not alone. Fortunately, doing so is relatively straightforward. You may do either of the following to open a Trump Child Savings Account:
- Submit IRS Form 4547 when you file your tax return
- Access an online portal (available in summer 2026)
To set up an account, you’ll need your child’s Social Security number and proof of citizenship status. You’ll also need your name, address, and SSN.
Current Status and What to Expect Next
Trump Accounts are set to launch in the near future. That gives you time to look at your family’s finances and existing savings options and decide whether a Trump Account is right for you.
Remember that a Trump Account shouldn’t be the only savings vehicle you use for your child. An experienced financial advisor can help you decide how a Trump Account may fit into your family’s financial plan.
Contributions to Trump Accounts will be allowed starting on July 4, 2026. For updates, visit TrumpAccounts.gov.
Choosing the Right Savings Option for Your Child
As a parent, you’re invested in your child’s future. With Trump Accounts, the U.S. Treasury is aiming to invest in that future, too. While you should always compare your options, a Trump Account may be a useful adjunct to your family’s existing financial strategy.
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