Federal 'Trump Accounts' open with a $1,000 seed for newborns
The federal government began opening Trump Accounts, tax-advantaged investment accounts for children created under last year’s budget law. Children who are U.S. citizens born between January 1, 2025, and December 31, 2028, are eligible for a one-time $1,000 government seed deposit; families and others can add contributions up to an annual cap, with the balance invested in a low-cost stock index fund that grows tax-deferred.
The structure resembles a hybrid of a 529 plan and an IRA, with withdrawals generally restricted until the child reaches adulthood. For the government the near-term cost is the seed deposits for eligible newborns; the longer-term aim is to build the habit and base of tax-advantaged investing early. How much households actually accumulate will depend on whether they add their own contributions, since the $1,000 alone is modest against college or housing costs by the time these children come of age.