Trump Child Savings Account: How Much You Can Save for a Child

Named after President Donald Trump, Trump Accounts were established under the One Big Beautiful Bill Act to help families build long-term savings for their children. Parents and guardians can contribute up to $5,000 each year for every child under 18, with the limit set to rise alongside inflation starting in 2028. Children born between Jan. 1, 2025, and Dec. 31, 2028, automatically receive a $1,000 federal deposit once a parent or guardian opens an account on their behalf. Private contributions can begin in 2026, and any investment growth is tax-free when the funds are used for qualified expenses.

A financial advisor can help you plan and save for your child’s future. Connect with an advisor for free.

What Is a Trump Child Savings Account?

A Trump Account is a federally sponsored savings program created under the One Big Beautiful Bill Act of 2025 to promote early and sustained wealth building for children. These accounts are structured to function much like tax-advantaged education or retirement accounts but with a focus on children’s future needs, ranging from education to housing and entrepreneurship.

By combining automatic federal seed funding for eligible children with tax-free growth for qualified uses, Trump Accounts aim to encourage families across income levels to begin saving from birth. The seed funding is only available to children born on or after Jan. 1, 2025, though anyone under the age of 18 may be eligible for an account.

Trump Child Savings Account Contribution Limits

Under the One Big Beautiful Bill Act, each Trump Account can receive up to $5,000 in personal contributions per year for every eligible child under age 18. This annual cap applies per beneficiary rather than per household, allowing families with multiple children to fund separate accounts. Employers can also make a $2,500 annual contribution.

Beginning in 2028, the contribution limit will be indexed to inflation, meaning it can increase automatically to reflect changes in the cost of living. The law also provides for a $1,000 federal seed contribution for children born between Jan. 1, 2025, and Dec. 31, 2028, once a parent or guardian elects to open the account.

Private contributions are not permitted during the first 12 months after the law’s enactment, delaying the start of deposits until 2026. Contributions are made with after-tax dollars, and future withdrawals may qualify for tax-free treatment when used for approved purposes.

How Trump Accounts Work

Trump Accounts operate under a framework similar to traditional IRAs, but they are specifically structured for minors. Parents or guardians open and fund the accounts with after-tax contributions. Those funds can then be invested in Treasury-approved assets such as mutual funds, exchange-traded funds (ETFs) or other diversified portfolios. The $1,000 federal contribution for eligible children is automatically invested in a default index-based fund selected by the Treasury, providing consistent exposure to the broad U.S. market.

Funds in the account must generally remain invested until the beneficiary turns 18, when ownership transfers to the child. There are restrictions on withdrawals before that age, except in limited cases such as disability or death. Between ages 18 and 59 ½, account holders can make penalty-free withdrawals for qualified purposes like education or a first-time home purchase, though specific qualifying uses will depend on future Treasury regulations.

If funds are used for nonqualified purposes, the earnings portion of the withdrawal is taxed as ordinary income. Additionally, a 10% early withdrawal penalty may apply. Trump Accounts therefore mirror the structure of traditional IRAs in tax treatment while emphasizing savings and investment for early-life goals.

How Savings Can Add Up Over Time in a Trump Account

Assuming a long-term average annual return of 10%, consistent with the historical performance of the S&P 500, a Trump Account opened in 2025 with the $1,000 federal seed contribution and annual deposits of $5,000 could grow to roughly $233,556 by the time the child turns 18.

This projection illustrates how compound growth can magnify consistent yearly contributions over time. Even without any changes to contribution limits or investment strategy, the account balance would reflect the cumulative effect of reinvested earnings. This demonstrates how early, steady investing can translate into substantial long-term savings for a child’s future expenses.

Bottom Line

Trump Accounts represent a new approach to encouraging family-based saving and investing through federal policy. By pairing government seed funding with long-term, tax-advantaged growth, the program seeks to expand access to investment opportunities from an early age. While future regulations will clarify the permitted uses of funds, the framework underscores a broader shift toward private savings as a means of preparing for education, housing and other major milestones in a child’s financial future.

Tips for Helping Your Children Save

• A financial advisor can help you create a structured savings and investment plan tailored to your family’s goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• A custodial account, such as a UGMA or UTMA, allows parents to invest on behalf of their child. These accounts can hold stocks, bonds, and mutual funds, giving savings time to grow. Once the child reaches the age of majority, the funds become theirs to use for education, a first caror other goals.
• Just as employers match 401(k) contributions, parents can match what their children save. This motivates kids to contribute regularly and helps them see the rewards of consistent investing over time.

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