Trump Accounts Launch July 4 Offering Children a 1000 Dollar Federal Seed Investment

The federal government launched Trump Accounts on July 4, 2026, creating tax-advantaged investment accounts for children under 18. The program, established under the One Big Beautiful Bill Act, includes a $1,000 federal seed deposit for children born between January 1, 2025, and December 31, 2028.

Accounts are held in the child's name, with a parent or legal guardian acting as custodian until the child turns 18. Parents open accounts by submitting IRS Form 4547. As of launch, accounts are held at Robinhood with administrative support from BNY.

Funds must be invested in broad, low-cost U.S. equity index funds or ETFs with an expense ratio capped at 0.10 percent. The default investment is the State Street SPDR Portfolio S&P 500 ETF.

Total contributions from individuals and employers cannot exceed $5,000 per year, indexed for inflation after 2027. Employers may contribute up to $2,500 annually per employee, which counts toward the $5,000 limit but is not taxable income for the employee. The $1,000 federal seed money, qualified charitable gifts, and rollover contributions do not count toward the annual cap.

Withdrawals are generally prohibited until the year the child turns 18, when the account transitions to traditional IRA rules. Early withdrawals may be subject to income tax and a 10 percent penalty, with exceptions for qualified expenses including higher education, first-time home purchases up to $10,000, and certain emergency medical costs.

The Michael and Susan Dell Foundation is offering a $250 charitable deposit for qualifying children age 10 or younger living in specific ZIP codes. Financial advisers are urging families to review how the accounts may affect college financial aid eligibility before contributing.