What are Trump Accounts?
Trump Accounts are government-established savings accounts introduced under the One Big Beautiful Bill Act (OBBBA).
The U.S. Treasury automatically creates these accounts for babies born between 2025 and 2028 to help families build long-term savings and benefit from compounded investment growth.
Each Trump Account begins with a $1,000 government contribution, which is invested in the stock market to grow over time. Parents and family members can contribute up to $5,000 per year.
Additionally, any child under 18 can establish a Trump Account. However, only babies born during the program window (2025–2028) will automatically receive the $1,000 seed contribution.
The origin of the Trump Savings Account
President Donald J. Trump introduced “Trump Accounts” as part of the One Big Beautiful Bill under Section 530A.
This plan creates special investment accounts for all newborn American children.
The accounts are tax-deferred, meaning families don’t pay taxes on the money while it grows.
Who is eligible for these accounts?
According to the bill, children must be born between January 1, 2025, and December 31, 2028, to receive $1,000 seed money.
In addition, eligible children must be U.S. citizens and have a Social Security number.
Children born before 2025 are not eligible for the $1,000 starting amount.
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How do Trump Savings Accounts work?
Under the pilot program, the U.S. Treasury will automatically open an account for eligible children. Parents are not required to sign up or take any special action to receive the initial deposit.
Trump Accounts are designed to encourage long-term savings and investing.
They follow many of the same tax rules and guidelines as traditional IRAs, with some differences based on the child’s age and contribution limits.
Note: Trump Savings Accounts are part of a proposed program and are still pending final implementation as of September 2025. Details may change based on legislative updates.
How do contributions work?
Parents and others can begin contributing to a newborn’s Trump Account starting July 4, 2026.
Annual parent contributions: Up to $5,000 per year until the calendar year when the child turns 18.
Employer contributions: Up to $2,500 annually, which does not count as taxable income for the child or their parents.
After age 18: Contributions follow traditional IRA rules. For example, in 2025, the annual contribution limit for individuals under 50 is $7,000.
How do withdrawals work?
Trump Savings Accounts have specific rules for when and how money can be withdrawn.
At age 18, account holders can withdraw up to half of the funds.
Earnings are taxed at the lower long-term capital gains rate if used for approved purposes, like education or buying a home.
If the money is used for non-approved reasons, withdrawals are taxed as regular income, and a 10% penalty may apply.
Between ages 25 and 30, account holders can access their full account balance for approved uses without penalty.
After age 30, funds can be withdrawn for any purpose, though taxes may still apply depending on gains.
How do taxes work?
Contributions made to a Trump Account before the child turns 18 are not tax-deductible. This means parents and others cannot reduce their taxable income by contributing to a Trump Account.
However, funds within the Trump Account grow tax-deferred, meaning you won’t owe taxes on any investment earnings while the funds remain in the account.
When the child withdraws the funds after turning 18, withdrawals are generally subject to capital gains taxes rather than ordinary income taxes.
This differs from traditional IRAs and other retirement accounts, where contributions can reduce taxable income and earnings grow tax-deferred, but withdrawals are typically taxed as ordinary income.
Investment Rules for Trump Accounts
Trump Account funds must be invested in “eligible investments” until the child turns 18. This rule helps protect the account’s purpose by focusing on simple, low-cost, and long-term growth.
According to H.R. 1 (One Big Beautiful Bill Act), eligible investments for Trump Accounts are defined as:
Any mutual fund or exchange-traded fund (ETF) that:
Tracks the returns of a qualified index;
Does not use leverage;
Has annual fees and expenses capped at 0.1% of the fund balance; and
Meets any other criteria determined appropriate by the U.S. Treasury Secretary.
A “qualified index” includes the Standard & Poor’s 500 stock market index or any other index that:
Is comprised primarily of equity investments in U.S. companies;
Has regulated futures contracts traded on a qualified board or exchange;
Excludes sector- or industry-specific indexes, but market-capitalization-based indexes are allowed.
Source: H.R. 1, 119th Congress, §530A
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How much could the Trump Account be worth?
The future value of a Trump Account depends on how much is contributed and the annual rate of return.
Historically, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500, has achieved an average annualized return of approximately 10.59% over the past 18 years.
Because SPY closely reflects the type of Treasury-approved large-cap equity index that Trump Accounts are likely to invest in, a 10% annual return is a reasonable assumption for illustrative purposes.
Here’s what the Trump Account could be worth:
If only the $1,000 government contribution is made with no additional deposits, the account could grow to approximately $6,135 after 18 years.
If a family contributes the maximum of $5,000 per year, the account could grow to over $200,000.
These figures are for illustration purposes only and do not guarantee future performance. Actual results may vary based on market conditions and other factors.
What to Remember About Trump Accounts
Trump Accounts are designed to give the next generation a financial head start by combining early savings, long-term investing, and the power of compound growth.
It's important to note that Trump Accounts are part of a pilot program and remain in the planning stage, meaning details could change before the program is officially launched.
While Trump Accounts offer a unique savings opportunity, they’re just one part of a comprehensive financial plan. It’s important to consider how this program fits your overall financial goals and strategy.