Trump Accounts launch on July 4 with $1,000 Treasury contribution for eligible children

The Fourth of July marks the official launch of Trump Accounts, a new type of custodial individual retirement account for children. Any child with a Social Security number who is under 18 by the end of the year the account is created qualifies. For children born between January 1, 2025 and December 31, 2028 who are U.S. citizens with a Social Security number, the Treasury Department will provide an initial $1,000 deposit.

Parents, relatives, and friends may contribute up to $5,000 annually in after-tax dollars until the year the child turns 18. Employers that choose to participate may contribute up to $2,500 per year.

Contribution sources and stock donations Companies, nonprofits, state and local governments, and individuals may also contribute. In December, tech billionaire Michael Dell and his wife Susan announced plans to donate $6.25 billion, which would provide $250 to 25 million children.

The Treasury Department announced Thursday that Trump Accounts can accept donations of public stock. Officials said such gifts would be transferred to the accounts consistent with the donor's instructions, applicable law, and Treasury guidance.

Default investment selection Money contributed to Trump Accounts at launch will be placed in the State Street SPDR Portfolio S&P 500 ETF as the initial default investment. The department stated the fund was selected to provide broad exposure to the U.S. stock market while maintaining expenses below the statutory fee limitation.

The S&P 500 has averaged annual returns of 10% to 11% over the last 30 years. The department noted that additional investment options, including other S&P 500 and total U.S. stock market ETFs, will become available in the coming months. Until that functionality is added, all contributions will remain in the default fund.