U.S. Treasury to deposit $1,000 in new accounts for newborns starting July 4
The Treasury will launch “Trump Accounts” on Independence Day, placing a $1,000 seed deposit in each newborn’s account and offering additional contributions for older children.
The U.S. Department of the Treasury announced that about 1.5 million newborns will receive a $1,000 seed deposit when “Trump Accounts” open on July 4, coinciding with the nation’s 250th birthday. The accounts will be invested in low-cost index funds and will convert to traditional IRAs when the child turns 18, after which the same rules for IRAs will apply.
An additional roughly 5 million children under 18 who have already signed up will have their accounts activated on the same date, though they will not receive the newborn seed deposit. Up to 25 million children aged 10 or younger in qualifying ZIP codes may receive a $250 charitable contribution from the Michael & Susan Dell Foundation. After 2027, annual contributions from families, relatives and employers could rise to $5,000 per child, adjusted for inflation.
"For context, nearly 40% of Americans have no exposure to U.S. equities," Treasury Secretary Scott Bessent told the Senate Finance Committee. "Trump Accounts represent a profound reimagining of that arrangement. They will ensure that every American child can benefit from private ownership and compound growth; that every American baby, in short, is born a shareholder."
Eligibility for the $1,000 seed money requires the child to be born between Jan. 1 2025 and Dec. 31 2028, be a U.S. citizen and have a Social Security number. No contribution is required to open an account, but contributions are encouraged to grow the savings. The annual non-government contribution limit is $5,000 per child, with employers allowed to contribute up to $2,500, which counts toward the cap.
Financial advisers note that the accounts differ from 529 college-savings plans, citing limited investment options and tax treatment. Some see the accounts as a complement to existing education and retirement strategies, while others point to a potential Roth IRA conversion at age 18 that could provide tax-free growth if the conversion falls below the standard deduction.
Parents can enroll through the Trumpaccounts.gov portal or the IRS website, and a dedicated app is also available. Accounts may be opened at any time before the child turns 18.