A Trump Account is a new type of investment account created in 2025 specifically for children. It works a lot like a custodial IRA: the account belongs to the child, but an adult manages it until the child is old enough to take over.

These accounts are expected to become available on July 5, 2026. At the beginning, the U.S. Treasury will set up and manage the accounts, and later families will be able to move them to regular financial institutions.

One of the best things is a planned one-time $1,000 government contribution for children born between January 1, 2025, and December 31, 2028. Beyond that, parents, relatives and even charitable organizations can add money to the account. In general, the money cannot be withdrawn before the child turns 18. After that point, the account follows traditional IRA rules.

Trump Accounts are designed to be simple and conservative when it comes to investing. The money can only be invested in low-cost index mutual funds or ETFs that track major stock indexes and are mostly invested in U.S. companies. Borrowing to invest is not allowed, and fees are capped at 0.10 percent, keeping costs very low and avoiding complicated strategies.

Each year, a child’s Trump Account can receive up to $5,000 in contributions, and that money can come from different people or sources. The government’s one-time $1,000 contribution does not count toward that yearly limit, and some contributions from charities or government programs don’t count either. However, that money will be taxed later when it’s taken out.

Adults can contribute their own money to a Trump Account without the child needing to have earned income. These personal contributions are made with after-tax dollars and generally are not taxed again when withdrawn.

A unique feature of Trump Accounts is that employers may also contribute. Employers can put in up to $2,500 per year per employee and can divide that amount among the employee’s children. Employees may also choose to redirect part of their paycheck, before taxes, into a child’s account if their employer offers the option. Together, employer and employee contributions cannot exceed the $5,000 annual limit per child, and because these contributions go in pre-tax, they are taxable when the money is eventually withdrawn.

Money can also come from states, local governments, or qualifying charities, and those contributions do not count toward the annual limit either, though they are taxable later. Trump Accounts can be rolled over into other Trump Accounts, with the tax treatment following the original source of the money. Because different contributions are taxed differently in the future, keeping accurate records is especially important. No matter where the money comes from, any investment earnings are taxable when withdrawn.

Taxes are an important consideration with Trump Accounts, especially because of the so-called kiddie tax. Withdrawals funded with pre-tax contributions count as unearned income for the child, which means some of that income could be taxed at the parent’s tax rate rather than the child’s lower rate. This can be particularly relevant for families with college-age children, where even modest withdrawals could result in a larger tax bill than expected.

Overall, Trump Accounts are meant to give families a straightforward, low-cost way to start investing early for a child’s future, with strong limits on early withdrawals and simple investment choices. For parents planning ahead for a newborn or young child, these accounts may become a useful part of a broader education, retirement, and tax strategy as more details and tools become available closer to launch.