The U.S. Treasury Department is set to introduce Trump Accounts on July 4, 2026, offering new savings options for children. Parents can initiate an account when filing taxes by selecting a box on Form 4547, obtaining the $1,000 government seed money.
Every child born between January 1, 2025, and December 31, 2028, qualifies for the $1,000 contribution, invested in a low-cost index fund for long-term growth.
Children under 18 can open an account, with parents as custodians until the child reaches 18. Annual contributions from family members or others are limited to $5,000, although these contributions are optional.
Upon reaching 18, the account functions similarly to an IRA, with withdrawals made before 59.5 incurring a 10 percent early withdrawal penalty, except for approved purposes.
Investment choices will be restricted to low-cost domestic ETFs or mutual funds, with funds allocated in a diversified portfolio of low-cost index funds to maximize long-term growth while minimizing risk.
Experts recommend seeking advice from a tax or investment professional prior to making contributions, staying informed about Treasury guidance, and filing in a timely manner to secure eligibility for the $1,000 government contribution.
