Trump Accounts Offer Eligible Children $1,000: Contributions Begin 4 July 2026

Parents with children born between 2025 and 2028 will be able to claim a $1,000 government investment account through a new scheme launching on 4 July 2026. These accounts, known as Trump accounts, function similarly to retirement funds, investing in stock market indexes such as the S&P 500. However, parents must actively sign up—the money is not provided automatically.

Funds in the accounts will remain locked until the child reaches the age of 18. The investments are limited to low-cost index funds with fees capped at 0.1%. These accounts grow tax-free until withdrawal, mirroring traditional retirement savings plans.

Nevertheless, financial experts have issued caution, warning parents against contributing additional personal funds beyond the initial government deposit. Adam Michael, director of tax policy studies at the Cato Institute, explained that Trump accounts have 'many more strings attached' than alternatives like 529 education plans or Roth IRAs.

The consensus among financial professionals is clear: claim the $1,000 but avoid topping up the account with personal savings.

Who Qualifies for the $1,000 Deposit?

According to IRS rules, eligible children must be US citizens born between 1 January 2025 and 31 December 2028. Children born before 2025 will not qualify for the government's $1,000 deposit.

In addition, technology executive Michael Dell and his wife Susan have pledged $250 each for up to 25 million children born between 2014 and 2024 in lower-income ZIP codes. These contributions are aimed at families in areas where median household incomes are $150,000 or less.

Parents are required to actively sign up for accounts via IRS Form 4547 or through the official website trumpaccounts.gov. The online portal is scheduled to launch in mid-2026.

How the Money Grows — and Why Experts Are Cautious

Funds must be invested in low-cost index funds with annual fees capped at 0.1%. Based on historical S&P 500 returns of approximately 10% per year, the initial deposit could grow to around $5,500 over 18 years, according to financial analysis.

The money will grow tax-free until it is withdrawn.

Despite the growth potential, experts advise caution regarding personal contributions. Adam Michael noted that Trump accounts have 'many more strings attached and complicated rules' that make them less attractive as an overall investment vehicle. He recommends options like 529 education savings plans and Roth IRAs for those wishing to contribute personal funds, citing their greater flexibility and tax advantages.

Madeline Brown, a wealth expert at the Urban Institute, echoed this view, stating that Trump accounts are inferior for personal contributions. 'The gift is the biggest part of this,' she said, emphasising that the free $1,000 government deposit is the primary reason to open an account.

Both experts agree that parents should claim the free money but avoid adding their own funds, which are better suited to other types of accounts.

What You Can and Cannot Do with the Account

Withdrawals are restricted before 1 January of the year the child turns 18. After that date, accounts function similarly to traditional IRAs.

An early withdrawal penalty of 10% applies before age 59½, though exceptions exist for first-time home purchases up to $10,000, higher education expenses, and disability.

Withdrawals for these purposes will avoid the penalty but still be taxed as income.

During the growth period, family members can contribute up to $5,000 annually, and employers can contribute up to $2,500 tax-free.

All contributions must cease once the child reaches 18.

When and How to Claim

Contributions to Trump accounts will not be accepted before 4 July 2026—the date marks the 250th anniversary of US independence.

The IRS will send activation instructions to eligible families starting in May 2026. Parents, guardians, or grandparents can sign up using IRS Form 4547 or via the official website trumpaccounts.gov, which is set to launch mid-2026.

Families have until 31 December of the year the child turns 17 to open an account.

This extended window allows parents to see how the programme performs before deciding whether to contribute personal funds beyond the initial government deposit.