Millions of Children Enrolled in New Government Savings Program

More than six million children have been signed up for the Trump Account program, according to Treasury data, with 1.4 million eligible for the initial $1,000 government contribution. The initiative, created under the One Big Beautiful Bill Act, permits families to add up to $5,000 annually and invests the funds in low-cost index funds.

The accounts are open to all income levels, but Treasury Secretary Scott Bessent noted that many applications were filed during tax season using Form 4547 or through the TrumpAccounts.gov portal. Financial firms BNY and Robinhood manage the accounts, gaining a large influx of new customers.

Experts say the program is the largest effort of its kind in the United States. Elaine Maag of the Urban-Brookings Tax Policy Center highlighted that similar state and local programs exist on a smaller scale. Ray Boshara, a longtime adviser on wealth-building legislation, said the concept has bipartisan roots despite some Democrats’ discomfort with the Trump branding.

Critics caution that the name may deter some families from enrolling. Financial coach Kimberly Zimmerman Rand advised clients not to let the branding discourage participation, while a Democratic father from Leominster expressed willingness to open an account for his infant daughter despite personal political views.

When a child turns 18, the account converts to an individual retirement account, which restricts early withdrawals except for specific purposes such as a first-time home purchase, education or medical expenses. Rand warned that young adults might be tempted to use the funds for immediate needs rather than long-term savings.

The White House Council of Economic Advisers estimates that, with maximum annual contributions and moderate returns, an account could grow to about $300,000 by age 18, though a single $1,000 seed contribution would yield roughly $5,000.

Data show that 86 % of account holders come from families earning less than $200,000 a year, a figure that still reflects a higher share of wealthier families relative to the national distribution of child-bearing households. Maag noted the program could widen the wealth gap if higher-income families participate disproportionately.

Nonprofit groups such as Commonwealth are offering free financial-education support to low- and moderate-income families. Several corporations, including Bank of America, Uber and Chipotle, have pledged to match employee contributions. Philanthropists Michael and Susan Dell announced a $6.25 billion donation to accounts for children in lower-income ZIP codes, and investor Ray Dalio pledged $250 per eligible account in his home state.

Boshara emphasized that the accounts could serve as a community asset, signaling broader investment in children’s financial futures.