Child Savings Program
Federal Trump Accounts Launch July 4, Offering Children a $1,000 Savings Start
Starting July 4, 2026 — the 250th anniversary of the Declaration of Independence — parents can begin contributing to "Trump Accounts," a new federal savings program for children created by the One Big Beautiful Bill Act. Every eligible child born between 2025 and 2028 receives a $1,000 government seed deposit automatically, according to KOAA.
About 6 million children have already signed up as of the launch date, WKBW reports. But millions more are still eligible — and parents who act now could set their children up with a significant financial head start by adulthood.
How Trump Accounts Work and Who Qualifies
Trump Accounts are codified under Internal Revenue Code Section 530A, giving them the nickname "530A accounts." They work like a traditional Individual Retirement Account (IRA) — a tax-advantaged savings vehicle — but with one key difference: the child does not need to have earned income to qualify, according to ABC15. The account is held in the child's name, with a parent or guardian acting as custodian until the child turns 18.
Parents can contribute up to $5,000 per year. Employers can also chip in up to $2,500 annually, and that employer contribution does not count as taxable income for the employee, Fox13 reports. The Dell Foundation — run by philanthropists Michael and Susan Dell — is also offering $250 deposits for up to 25 million children in lower-income ZIP codes born between 2014 and 2024.
$1,000 Seed Money and the Path to $1 Million
The federal government deposits $1,000 into every account opened for a child born between January 1, 2025, and December 31, 2028. President Trump has said the accounts should reach at least $50,000 by the time a child turns 18. The White House Council of Economic Advisers projects a balance of over $300,000 by age 18 for children who receive maximum contributions, according to KTVQ.
The long-term numbers are even bigger. A child getting $5,000 in annual contributions could see over $1 million by age 28, per CEA estimates. Treasury Secretary Scott Bessent has called the program a "rainy day fund" that can help end generational poverty. During the growth period — before age 18 — all funds must be invested in low-cost index funds tracking the S&P 500 or similar broad markets, with fees capped at 0.1%.
Withdrawal Rules and Tax Penalties Parents Must Know
When the child turns 18, the account automatically converts to a traditional IRA. That means withdrawals are subject to ordinary income tax rates. If funds are pulled out before age 59.5, early withdrawal penalties apply, WMAR2 News reports. Parents should treat this as a long-term retirement tool — not a college savings account like a 529 plan.
Legal experts at firms like Mayer Brown and Foley & Lardner have warned about the compliance complexity. The American College of Trust and Estate Counsel has also flagged an unresolved question: it is unclear whether contributions qualify for the annual gift tax exclusion, since funds cannot be accessed until age 18. The IRS is expected to issue further guidance.
How to Open an Account Starting July 4
To open an account or claim the $1,000 seed deposit, parents must file IRS Form 4547. The U.S. Treasury has designated Bank of New York (BNY) Mellon as the primary financial agent, partnering with Robinhood to manage initial accounts. A dedicated Trump Accounts mobile app was launched on May 28, 2026, for easy account management, according to Fox13.
First Lady Melania Trump also announced the "Fostering the Future" program, which allows state child welfare agencies to open Trump Accounts for foster children. Major financial firms including Fidelity and USAA have already begun integrating guidance for the accounts into their platforms, ABC15 reports, anticipating strong demand after the July 4 launch.
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