White House launches ‘Trump Accounts’ for children with $1,000 seed contribution

The White House announced this week the nationwide rollout of “Trump Accounts,” a new savings scheme available to all US children under 18, with babies born between 2025 and 2028 receiving a $1,000 starting contribution and accounts going live on 4 July.

The accounts can be opened for any child with a valid Social Security number via a dedicated app, the administration said, and allow family, friends and employers to contribute up to $5,000 per year per child. By law, funds must be invested in a low-cost index fund intended for long-term growth.

Withdrawals are taxed and may incur a 10% penalty if taken before age 59½, unless used for approved purposes such as higher education, buying or building a first home, or personal emergency expenses, the White House added.

Officials described the scheme as a way to expand stock ownership among younger and lower‑income families, noting historical uneven distribution of market exposure. The administration also reported that more than half a million accounts have received the $1,000 baby subsidy and that American families had contributed nearly $125 million to date.

Independent analysts offered mixed assessments. Will McBride of the Tax Foundation warned the program’s complexity could limit uptake to relatively well‑informed, higher‑income parents, while Adam Michel of the Cato Institute said the $1,000 subsidy is the main benefit and cautioned some families might withdraw funds at 18 to meet immediate needs, risking penalties.

Industry reactions varied. Edward Jones highlighted that the $1,000 seed could remove an initial participation barrier, and several firms including BlackRock, Visa and Dell pledged support; BlackRock noted around 40% of Americans lack market exposure.

The administration said roughly six million families signed up before the program launched, a small share of eligible children, and that the $1,000 subsidy has been deposited into more than half a million accounts so far. Provisional data show about 3.6 million children were born in the US in 2025.

Trump Accounts projects, using historical S&P 500 averages, that the $1,000 starter sum could grow to about $6,000 by age 18 without further contributions. If $250 is added annually the account could reach $19,000 by 18, and at maximum annual contributions of $5,000 it estimates a pot as high as $271,000, while cautioning results are not guaranteed.

The White House framed the program as another tax‑efficient savings option alongside IRAs and 529 plans, and said it aims to create a clearer on‑ramp for families to begin saving and investing for their children’s futures.