'Trump accounts,' explained: Who qualifies, how they work and when you can claim

Core Points - The Trump administration has introduced a new savings initiative for children called "Trump accounts," which is part of the One Big Beautiful Bill Act [1] - These accounts are designed to function as long-term investment vehicles specifically for individuals under 18, with funding from federal seed money, private contributions, and potential employer or nonprofit deposits [2][3] Eligibility and Enrollment - Any child under 18 with a valid Social Security number can have a Trump account, established by an authorized adult [5] - The program is set to launch in mid-2026, with contributions starting after July 4, 2026, and parents of newborns from 2025 to 2028 can open accounts using IRS Form 4547, which is yet to be released [6] Funding and Contributions - Individuals can contribute up to $5,000 annually to a Trump account, while employers can contribute up to $2,500 per year [8] - The federal government will make a one-time $1,000 deposit into each eligible child's account [9] Investment Growth - Funds in Trump accounts must be invested in broad U.S. stock index funds, which track the overall performance of the U.S. stock market [12][13] - Treasury estimates suggest that a fully funded account could grow to as much as $1.9 million by age 28, with lower projections still yielding nearly $600,000 [17] Withdrawal Rules - Funds are locked until the child turns 18, with strict limits on withdrawals to promote long-term growth [19][20] - Upon reaching adulthood, the account will function similarly to a traditional IRA, with specific tax treatments and distribution options [21][22]