Key Takeaways

• Trump Accounts are a new, government-backed savings account for children under 18. The accounts come with a $1,000 seed deposit for children born between January 1, 2025, and December 31, 2028. 1 · Accounts are automatically invested into a low-cost U.S. stock index fund, with a contribution limit of $5,000 per year.

• There are key distinctions between Trump Accounts and traditional retirement savings accounts. For example, you don’t need earned income to qualify.

• The money cannot be withdrawn until the child turns 18. At that point, the account converts into a standard traditional IRA, where standard IRA rules apply.

• The account complements existing tools like 529 plans and UTMA accounts but is not a replacement for them.

Trump Accounts are a new savings account option for children, created by the One Big Beautiful Bill Act (OBBBA) of 2025. Accounts officially opened for contributions on July 4, 2026.

The logic behind the account is simple. Give children a head start in the stock market and expand stock ownership beyond families who already have the means to invest. Compounded growth is maximized when this process is started early, ideally at birth. However, these new accounts come with an entirely new set of rules; it is important to understand how Trump Accounts function when considering them as a part of a child’s larger financial plan.

Who is Eligible for a Trump Account?

Any child under the age of 18 with a valid Social Security number is eligible for a Trump Account. A parent or legal guardian will typically open the account. If neither is available, the order of priority is legal guardian, parent, adult sibling, or grandparent.

Every Trump Account runs through what’s called a “growth” period, starting when the account is opened and lasting through December 31 of the year before the child turns 18. During this stretch, contributions flow into the account but cannot be withdrawn. Investments are restricted to a narrow list of low cost, U.S. stock-focused funds.

Once the child turns 18, the account automatically converts to a Traditional IRA and is subject to Traditional IRA rules. At that point, it may be worth exploring whether converting the Trump Account to another account type could make sense, either immediately or down the road. Discuss these opportunities with your advisor.

How are Trump Accounts Funded?

Once the account is opened, family, friends, and even an employer can contribute up to a combined total of $5,000 per year. Contributions in excess of $5,000 will be charged a 6% fee.

Unlike a Roth IRA, there is no earned income requirement to contribute. This means that the account is eligible to be funded starting as soon as the child has a valid Social Security number.

For eligible U.S. citizen children born between January 1, 2025, and December 31, 2028, with a valid Social Security number, the federal government will deposit $1,000 into the account, with no cost to the family. This deposit does not count against the $5,000 limit. Employers can chip in as well, up to $2,500 per year, per employee. Some companies are choosing to match the initial government sponsored $1,000 as a one-time contribution for their employees.3 It should be noted that employer money does count against the shared $5,000 cap on annual account contributions.

Additionally, some employers offer payroll deductions to automate account contributions. This can work two ways: pre-tax, which counts toward the employer’s $2,500 cap, or after-tax, which doesn’t impact the $2,500 cap but still counts toward the family’s overall $5,000 limit. It may be worthwhile to see if your employer offers these options.

None of this happens on its own. Even if a child qualifies for the $1,000 seed funding, it must be claimed through www.TrumpAccounts.gov, the mobile app, or by filing IRS Form 4547 directly.

How are Trump Accounts Invested?

Every dollar in a Trump Account goes into a low-cost ETF that tracks a broad U.S. stock index, such as the S&P 500. As of July 2026, every account defaults into the State Street SPDR Portfolio S&P 500 ETF (SPYM), with fees capped at 0.10%. Four more fund choices are expected in the coming months.

How is Your Money Taxed?

The Trump account operates on a unique hybrid system that pairs after-tax funding with a multi-layered tax structure at withdrawal.

Individual contributions to a Trump Account are not tax-deductible, meaning you will not receive an immediate tax break the year the money is deposited. However, the real power of the account lies in its tax-deferred growth. As long as the assets sit within the account, any compound interest, dividends, or market gains grow untouched by the IRS during the child’s minor years.The true tax bill lands later in life when the child eventually withdraws the money. Unlike a standard investment account, the tax treatment of a distribution depends on where the initial funding came from:

• Post-tax principal contributions originally made by parents, grandparents, friends, or by the child come out entirely tax-free.

• The $1,000 federal seed grant, pre-tax employer matching contributions, and accumulated investment growth are taxed as ordinary income upon withdrawal.

• Because investment growth is taxed as ordinary income rather than at lower capital gains rates, it is suggested to track contribution sources to maximize long-term wealth efficiency.

How to Access Trump Account Funds

Money cannot be withdrawn before the child turns 18.

On January 1 of the year the child turns 18, the account will convert to a Traditional IRA. Legal control of the account passes to the child at that point.

Withdrawals from a Trump Account can happen for any reason and are taxed as ordinary income. Pulling money out before age 59 1/2 will incur a 10% penalty, unless the withdrawal qualifies for an approved exception, such as:

• Education expenses
• First-time home purchase
• Medical expenses
• Disaster recovery

Once the Trump Account becomes a traditional IRA, standard conversion and rollover rules apply. At age 18, converting a Trump Account to a Roth IRA may be a smart move if your child’s income is low or nonexistent.

How do Trump Accounts Compare to Other Savings Vehicles?

Families already have several established options for saving on behalf of a child, including 529 plans, UTMA/UGMA accounts, and custodial Roth IRAs. Here’s how a Trump Account compares to each.

Account Type	Contribution Limits	Tax Treatment of Growth	Tax Treatment at Withdrawl	Eligible Uses	Key Requirements/Notes
Trump Account	Up to $5,000 per year, combined from all sources	Tax-Differed	Growth is generally taxed as ordinary income when withdrawn	Broad range of uses beyond education	No earned income required; contributions can begin at birth
529 Plan	Generally much higher contribution limits than a Trump Account	Tax-free growth	Qualified withdrawals for education expenses are tax-free	Education-related expenses	Best suited for education savings
UTMA/UGMA Account	No federal contribution limit beyond standard gift tax rules	Earnings are taxed annually under kiddie tax rules	No special tax-free withdrawal treatment	Can hold virtually any type of asset	Flexible investment options but less favorable annual tax treatment
Custodial Roth IRA	Limited to the lesser of the child’s earned income or the annual IRA contribution limit	Tax-free growth	Qualified withdrawals are entirely tax-free	Retirement (with certain qualified exceptions)	Child must have earned income to contribute

The Bottom Line

Like any investment account, Trump Accounts come with their own rules, benefits, and tradeoffs. It’s important to understand how the account works before contributing or making decisions about withdrawals or conversion. We believe the Trump Account isn’t a replacement for 529, UTMA, or custodial Roth. It should be viewed as another tool in a child’s savings and financial plan.

As more guidance becomes available and the first generation of Trump Account holders approaches adulthood, these accounts may become an increasingly important part of conversations around saving, investing, and building wealth from an early age./

If you’re considering whether a Trump Account should be part of your child’s financial plan, reach out to a Curi Capital advisor today and we’ll help you navigate the considerations.

Frequently Asked Questions

What is a Trump Account?

A Trump Account is a new type of tax-advantaged savings account for children under 18, structured like a starter IRA. It’s owned by the child, managed by a parent or guardian, and invested in low-cost U.S. stock Exchange Traded Funds (ETFs).

Who qualifies for the $1,000 Trump Account seed deposit?

Any child who is a U.S. citizen with a valid Social Security number, born between January 1, 2025, and December 31, 2028, qualifies.

How much can be contributed each year, and by whom?

Family, friends, and employers can contribute a combined total of up to $5,000 per year per child. There’s no earned income requirement, so contributions can start from birth.

When can the child access the money?

No withdrawals are allowed before age 18. At that point, the account converts to a traditional IRA, and normal IRA withdrawal rules apply, including a 10% penalty on early withdrawals before 59½ unless an exception applies.

 Is a Trump Account taxed the same way as a 529 plan or Roth IRA?

No, growth in a Trump Account is taxed as ordinary income when withdrawn. This is unlike a 529 plan or Roth IRA, where qualified withdrawals are tax free.