By Benjamin Roure L'Hermitte
A Trump account is an investment account opened in the name of an American child, created by the 2025 tax law. The government deposits $1,000 once for each US citizen child born from 2025 through 2028, family, friends and a parent's employer can add up to $5,000 a year, and the money is invested in very low-cost US stock index funds, locked until the child turns 18. This guide explains who qualifies, how to claim the account, how it is invested and how it is taxed, based on the IRS and the Treasury.
- $1,000 deposited once by the government for each US citizen child born from January 1, 2025, through December 31, 2028, with a Social Security number.
- $5,000 a year at most from family, friends or an employer ($2,500 at most from the employer), since July 4, 2026.
- Fees of 0.1% or less: the money can only go into unleveraged funds tracking an index of mostly US stocks.
- Locked until 18, then traditional IRA rules: earnings taxed on withdrawal, 10% penalty before age 59½ unless an exception applies.
Since October 1, 2026, the Treasury has automatically opened an account for every eligible child under 18. Parents have two steps left: claim and activate the account, and request the $1,000 separately if the child qualifies.
This guide sets out the rules published by the IRS as of November 9, 2026, some of which are still proposed regulations. To see how this account fits with others, our guide on where to invest money covers retirement and savings accounts.
TL;DRA Trump account is a child investment account created in the US in 2025. The government deposits $1,000 for citizen children born from 2025 through 2028 who have a Social Security number, on election through Form 4547. Family, friends and employers can contribute up to $5,000 a year since July 4, 2026. The money is invested in US stock index funds with fees of 0.1% or less and stays locked until the year the child turns 18, after which traditional IRA rules apply.
What is a Trump account?
A Trump account is a special type of individual retirement account (IRA) opened for a child, created by section 530A of the Internal Revenue Code under the 2025 tax law the IRS calls the Working Families Tax Cuts. Until the year the child turns 18, nothing can be withdrawn: this is the growth period, during which the money is invested in stocks. After that, the account works like a traditional IRA.
Trump account eligibility
| The account | The government's $1,000 | |
|---|---|---|
| Age | Under 18 at the end of the election year | Born from January 1, 2025, through December 31, 2028 |
| Citizenship | Eligible child with a Social Security number | US citizen |
| Social Security number | Yes | Yes |
| What to do | Opened automatically since October 1, 2026; claim it | Separate election on Form 4547, once per child |
How to open, claim and get the $1,000
- Claim the automatically opened account in the Trump Accounts app or website: the parent's identity and authority over the account are verified. Names, Social Security numbers and dates of birth must match Social Security Administration records.
- If the child was born from 2025 through 2028 and is a US citizen, file Form 4547 and select the $1,000 pilot program contribution, through the app, the website or your IRS Online Account. A request already made does not need to be repeated.
- Activate the account so that family, friends and employers can contribute.
According to the IRS, Robinhood Securities is the brokerage provider and initial trustee, and BNY is the Treasury's financial agent. Official information is on trumpaccounts.gov and the IRS Trump Accounts page: be wary of any message asking for a payment to receive the $1,000.
Who can contribute, and how much
| Source of the contribution | Limit | Counts toward the $5,000? | Creates tax-free basis on withdrawal? |
|---|---|---|---|
| Parents, family, friends | $5,000 a year in total | Yes | Yes |
| A parent's employer | $2,500 a year, not taxable to the employee | Yes | No |
| Government pilot contribution | $1,000 once | No | No |
| Governments and charities, contributions to a group of children | Depends on the program | No | No |
The $5,000 limit will be indexed to inflation after 2027. Unlike a regular IRA, the child does not need earned income for the account to receive contributions. No contribution is tax-deductible.
How the money is invested
During the growth period, the money can only go into eligible investments: mutual funds or ETFs that track the S&P 500 or another index of primarily US stocks, without leverage, with annual fees and expenses of no more than 0.1% of the amount invested. No individual stocks, no bonds, no crypto assets. Our guide to index funds vs ETFs vs mutual funds explains these products.
Taxes and withdrawals
- During the growth period: no tax on gains while the money stays in the account, and no withdrawals before January 1 of the year the child turns 18.
- After 18: traditional IRA rules apply. The part of a withdrawal that matches the family's contributions, the basis, is not taxed; the rest, earnings, the government's deposit and employer contributions, is taxed as ordinary income.
- Withdrawals before age 59½: a 10% additional tax applies unless an exception does, such as qualified higher education expenses or a first home purchase.
- The account remains a Trump account after 18, and can be moved to another Trump account.
What the account could grow to
| Scenario, assumed 6% annual return | Paid in | Value at 18 |
|---|---|---|
| The government's $1,000, nothing else | $1,000 | $2,854 |
| The government's $1,000 plus $100 a month from family | $22,600 | $41,672 |
Return chosen for illustration, before taxes: not a forecast, and a stock fund can fall several years in a row. The compound interest calculator lets you try other amounts and time frames.
Trump account, 529 plan or custodial account?
The Trump account is not the only account for a child in the US. A 529 plan targets education: its earnings are tax-free when used for qualified education expenses. A custodial account, UTMA or UGMA, belongs to the child, who takes control at the age of majority, and its income is taxed every year. The Trump account bets on long-term stock growth and the government's $1,000, at the cost of being locked until 18 and having its earnings taxed on withdrawal. The three can complement each other.
Trump account vs 529 plan: side by side
| Trump account | 529 plan | |
|---|---|---|
| Purpose | Long-term investing for the child, any use after 18 | Education: college, K-12 tuition, apprenticeships |
| Contribution limit | $5,000 a year in total, of which $2,500 from an employer | No annual federal limit; a lifetime cap set by each state |
| Tax break on contributions | None | None at the federal level; many states offer a state tax deduction |
| Investments | Low-cost US stock index funds only | Portfolios offered by the state plan, including age-based options |
| Withdrawals | Not before January 1 of the year the child turns 18, then traditional IRA rules | At any time |
| Tax on withdrawals | Earnings taxed as ordinary income, 10% penalty before 59½ unless an exception applies | Tax-free for qualified education expenses; otherwise earnings taxed plus a 10% penalty |
| Government money | $1,000 for children born from 2025 through 2028 | None at the federal level |
| Money left over | Stays invested under IRA rules | Change of beneficiary, or up to $35,000 rolled into the child's Roth IRA after 15 years |
For a family saving for college, the 529 has the stronger tax treatment: education withdrawals are entirely tax-free, and since 2026 they can cover up to $20,000 a year of K-12 tuition and related costs. A Trump account taxes its earnings on withdrawal, but it is the only one of the two that receives the government's $1,000 and tax-free employer contributions, and its money can be used for anything once the child is an adult. Many families will use both: the Trump account to collect the $1,000, the 529 for school costs.
Investment accounts for kids: the four options
- Trump account: for every child under 18 with a Social Security number, up to $5,000 a year, US stock index funds only, locked until 18.
- 529 plan: for education costs, with tax-free withdrawals for qualified expenses.
- Custodial account (UTMA or UGMA): a brokerage account in the child's name, managed by an adult, with no contribution limit or restriction on use; the child takes control at the age of majority set by the state, usually 18 or 21, and investment income above a threshold is taxed at the parents' rate.
- Custodial Roth IRA: only for a child with earned income, such as a summer job, up to that income within the annual IRA limit; withdrawals of earnings are tax-free in retirement.
For the principles behind investing, risk, diversification and time horizon, see our guide what is investing.
Frequently asked questions
Is a Trump account a savings account?
Not exactly. It is an investment account for children created by the 2025 tax law: the money is invested in US stock index funds, not left in cash, and it cannot be withdrawn before the child turns 18. Its value can go down as well as up.
Should I open a Trump account for my child?
The account is opened automatically for every eligible child since October 1, 2026; a parent only has to claim it. Claiming it costs nothing and is the only way to receive the government's $1,000 for a child born from 2025 through 2028. Whether to add money depends on the family's goals: for education costs, a 529 plan is more tax-efficient.
Trump account vs 529: which is better?
For education costs, the 529 plan: its withdrawals for qualified education expenses are tax-free. The Trump account receives the government's $1,000 for children born from 2025 through 2028 and employer contributions, and can be used for anything after 18, but its earnings are taxed on withdrawal. The two can be combined.
Can older kids get a Trump account?
Yes. Every eligible child under 18 with a Social Security number has had an account opened automatically since October 1, 2026, and family can contribute up to $5,000 a year. The government's $1,000, however, is reserved for children born from 2025 through 2028.
Who is eligible for the $1,000 Trump account contribution?
US citizen children born from January 1, 2025, through December 31, 2028, who have a Social Security number, on election by a parent or guardian through Form 4547. One contribution per child.
Do I have to open the account myself?
No. Since October 1, 2026, the Treasury automatically opens an account for every eligible child under 18. A parent must claim and activate it in the Trump Accounts app or website.
How much can you contribute to a Trump account?
Up to $5,000 a year in total from family, friends and employers, of which $2,500 at most from an employer. The government's $1,000 does not count toward this limit.
When can the child withdraw the money?
Not before January 1 of the year the child turns 18. After that, traditional IRA rules apply, with a 10% penalty before age 59½ unless an exception applies, such as education or a first home.
How is the money invested?
In mutual funds or ETFs tracking an index of primarily US stocks, such as the S&P 500, without leverage and with annual fees of 0.1% or less.
Are Trump account contributions tax-deductible?
No. Gains are not taxed during the growth period, and on withdrawal only the part contributed by family escapes tax; the rest is taxed as ordinary income.