The “Trump Account” for Babies Just Got a Major Boost: What You Need to Know
A new kind of savings vehicle for children—nicknamed the “Trump account”—was introduced as part of the One Big Beautiful Bill Act. Initially designed to give eligible newborns a $1,000 head start on investing, the program has now received an unprecedented philanthropic boost that could expand its reach to millions more children.
Here’s what you need to know.
What Is a Trump Account?
Trump accounts are custodial individual retirement accounts (IRAs) for kids under age 18. While they function much like traditional IRAs—with tax-deferred growth and taxes due on withdrawal—they include special rules that make them unique:
Eligible children born between Jan. 1, 2025 and Dec. 31, 2028 will receive a $1,000 grant from the U.S. Treasury to seed the account.
Anyone can contribute up to $5,000 per year in after-tax dollars (indexed to inflation) until the year the child turns 18.
Funds must be invested in ultra-low-cost diversified U.S. stock index funds with expense ratios of 0.1% or less.
The accounts will be available beginning July 4, 2026, with the Treasury Department overseeing the program and banks or financial institutions administering the accounts.
But Wait, There is More —A Historic Philanthropic Gift
In a sweeping announcement in December of 2025, Michael and Susan Dell revealed they are committing $6.25 billion (billion with a “B”) to seed Trump accounts for children who are too old to qualify for the government-funded $1,000 grants.
Under their gift:
Children 10 or under who were born before Jan. 1, 2025 will receive $250 into a Trump account once a parent opens one.
The initiative covers 25 million children living in ZIP codes with median incomes of $150,000 or less
Parents simply open the account—they do not need to apply for the Dell grant.
This is now the largest philanthropic effort ever directed toward American children.
Should You Add Your Own Money?
For most families, 529 plans and standard custodial accounts will remain more flexible and tax-efficient for additional contributions. However, for families who are already taking full advantage of those accounts—or for those simply wanting to build a long-term nest egg for their child—the Trump account offers a structured, low-cost way to start investing early.
The Bottom Line:
Ray Boshara, a Senior Advisor at the Federal Reserve Bank of St. Lous and a senior policy advisor with the Aspen Institute and Washington University in St. Louis, calls Trump accounts the beginning of a broader movement.
“We would like to see this idea continue and get better over time, just like any big policy,” he said. “The ACA, Social Security—they start off fairly flawed, but get much better and more progressive and inclusive over time. And that’s how we think about Trump Accounts. It’s a down payment on a big idea.” (PBS, December 2, 2025, “Trump makes announcement on ‘Trump accounts’ for babies as Dell family pledges more than $6 billion.”
He also notes the unique strength of the model: Trump accounts can accept contributions from government, philanthropy, and business—a rare combination that could expand opportunities for children over time.
This information is believed to be accurate at the time of publication. Please refer to the official US government releases for updates. Please refer to your tax professional for individual matters.
