Americans can start contributing to a Trump account starting July 4, when the new tax-advantaged investment accounts officially launch.
Starting Saturday, parents, guardians, employers and other contributors can deposit money into a child’s Trump account, also known as a 530A account. Children born between January 1, 2025 and December 31, 2028 who open an account will also receive a $1,000 Treasury contribution to be invested in the stock market.
Created as part of last year A big, beautiful Bill ActTrump accounts are designed to help children under 18 build savings, similar to how adults use individual retirement accounts to save for retirement.
“These accounts help ensure that children can begin building retirement savings as early as possible,” Emerson Sprick, director of retirement and labor policy at the Bipartisan Policy Center, a Washington, D.C.-based think tank, told CBS News.
US Treasury Secretary Bessent has described the accounts as a “Rainy day fund” Children can use it when they reach adulthood. According to a Treasury spokesman, six million people have registered so far.
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How do Trump accounts work?
Trump accounts are designed to make it easier for children to get started with investing. During the “growth period” – between account opening and the year the beneficiary turns 18 – contributions must be invested in mutual funds or exchange-traded funds or ETFs that track major indexes such as the S&P 500 and have fees or expenses of more than 0.1%. After this period, the account functions like a traditional IRA.
Bank of New York Mellon will initially manage Trump accounts in collaboration with online brokerage firm Robinhood. However, according to the Bipartisan Policy Center, the accounts can be transferred to a Trump account at another financial institution for the same beneficiary during the “growth phase.”
Parents can set up the savings vehicle via the Trump Accounts App or on the website trumpaccount.com. According to the Trump administration, funds deposited into the accounts will be invested in a broad stock market index. The Trump Accounts app provides an overview of the portfolio and its performance.
How high are the contribution limits?
Excluding the $1,000 government contribution and any charitable contributions, people can contribute up to $5,000 per child to a Trump account each year. Employer contributions are capped at $2,500 per year and count toward the $5,000 limit.
Some donors and Employer have already pledged financial support for Trump account holders. In December 2025, philanthropists Michael and Susan Dell said they would do it Donate $250 to each of the 25 million American children. The money will go to children born before 2025 who are under 10 and are not eligible for the state’s $1,000 seed donation.
Dell Technologies, founded by Michael Dell, as well other large companies Companies including Bank of America, JPMorgan Chase and chipmaker Micron Technology have also pledged to match the government’s $1,000 contribution.
When can the money be withdrawn?
Except in certain exceptional circumstances, funds generally cannot be withdrawn until the beneficiary reaches the age of 18. Once children reach this age, they can keep the money in the account or withdraw it to use for specific expenses such as education, buying a home, or starting a business.
However, if the beneficiaries for an unfounded reason before the age of 59.5. According to Sprick, if you withdraw your Trump account balance at the end of your life, you will be assessed a 10% early withdrawal penalty, as with traditional IRAs. Tax considerations are another point to consider. Contributions from individuals, including parents, guardians, and family members, are not tax deductible—unlike contributions to some other types of accounts, such as. B. 401(k)s.
“The person making these contributions does not receive any tax benefits from these contributions because the tax benefit is later realized by the account beneficiary,” Sprick said.
With that in mind, parents may want to consider how Trump accounts compare to other savings vehicles that may be preferable from a tax perspective, Sprick said. Other account types may also have fewer restrictions than Trump accounts, which have contribution limits and more limited investment tax benefits. according to experts.
“There are all kinds of accounts that people can use, whether it’s a 529 [plan] or just a savings account at their local credit union,” Sprick said. For those who open a Trump account, the biggest benefit will come from the $1,000 government contribution, he added.
If they have not already done so, parents and guardians can still open a Trump Account for their child by completing and submitting IRS Form 4547, provided the child is under 18 and has a valid Social Security number.
Edited by Aimee Picchi
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