Trump Accounts for Kids: What We Know So Far
A proposed $1,000 federal seed account for every child born 2025–2028. Here's what it means and how it compares to existing options.
"Trump Accounts" — officially called Money Account for Growth and Advancement (MAGA) accounts — are a new savings vehicle for children proposed in the One Big Beautiful Bill Act, currently moving through Congress. If enacted, these accounts would provide $1,000 in seed funding from the federal government for every American child born between 2025 and 2028, with tax-advantaged growth similar to a Roth IRA. Here's what we know so far and how to think about it alongside existing options.
What Are Trump Accounts?
As currently proposed, Trump Accounts would be tax-advantaged investment accounts for children born in the US between January 1, 2025 and January 1, 2029. The federal government would deposit $1,000 at birth. Parents and others could make additional contributions up to $5,000 per year. Funds would grow tax-free and withdrawals for qualified purposes — education, home purchase, or business startup — would also be tax-free.
The proposal would allow accounts to be invested in US stocks, bonds, and other qualifying assets. Unlike a 529 plan, Trump Accounts aren't limited to education expenses — the broader range of qualifying uses makes them more flexible as a general wealth-building tool for children.
What's Still Uncertain
As of late June 2026, the legislation is still moving through Congress and details may change before final passage. Key open questions include the exact investment options available, the full range of qualified withdrawal uses, whether the accounts are means-tested or available to all families regardless of income, and the timeline for implementation.
Don't make major financial decisions based on this proposal until it's signed into law and implementation details are published by the IRS or relevant agencies.
How Trump Accounts Compare to Existing Options
529 Plans: Tax-advantaged savings specifically for education. Contributions are after-tax but grow tax-free; withdrawals for qualified education expenses are tax-free. Broader investment options than proposed Trump Accounts, but more restrictive use cases. If the child doesn't use funds for education, there are penalties (though recent rule changes allow some rollover to Roth IRAs).
Custodial accounts (UGMA/UTMA): No contribution limits or use restrictions, but also no special tax advantages. Investment gains are subject to the "kiddie tax" rules until the child reaches adulthood.
Roth IRA for children: Requires earned income from the child. A Roth IRA is arguably the most powerful long-term savings vehicle for children who have qualifying earned income from jobs, but most young children don't qualify.
The Bigger Picture
Regardless of whether Trump Accounts become law, the underlying principle is worth embracing: starting savings early for a child dramatically amplifies long-term results through compound growth. $1,000 invested at birth in a broadly diversified index fund at a historical 7% annual real return would grow to roughly $15,000 by age 40 with no additional contributions.
The personal finance priority order still applies: before funding a child's savings account, make sure your own high-interest debt is under control. Use the Debt Payoff Calculator to see your timeline — paying off 21% credit card debt is a guaranteed return that beats almost any investment.
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This program is new — rules are still being clarified
Because this account type was created recently, some administrative details are still being worked out by the Treasury Department and IRS as the program rolls out, and guidance can change as agencies issue clarifications. What's described here reflects the rules as understood at publication; confirm current details before opening an account or making contribution decisions, since implementation specifics for a brand-new program tend to get refined after launch.
Frequently Asked Questions
Trump Accounts, officially called MAGA (Money Account for Growth and Advancement) accounts, are a proposed tax-advantaged savings vehicle for children born between 2025 and 2028 in the One Big Beautiful Bill Act. They would include a $1,000 federal seed deposit and allow up to $5,000 in annual contributions, with tax-free growth and withdrawals for education, home purchase, or business startup.
As of late June 2026, Trump Accounts are still proposed legislation moving through Congress and have not been signed into law. Details including investment options, income eligibility, and implementation timeline may change before final passage.
Trump Accounts would allow broader qualified withdrawal uses beyond education — including home purchase and business startup — while 529 plans are restricted to qualified education expenses. Both offer tax-advantaged growth, but 529 plans are already established and available now, while Trump Accounts are still proposed legislation.
No — the best time to start saving for a child is now, regardless of what legislation passes. Existing options like 529 plans and custodial accounts are available today. If Trump Accounts become law and your child qualifies, you can incorporate them into your strategy then.
Build your own financial foundation before funding a child's savings account.