If you’ve been hearing about "Trump Accounts" in the news and wondering if they’re right for your family, you aren't alone. Formally known as Section 530A accounts, these were created by the One Big Beautiful Bill Act of 2025 to give the next generation a head start on financial independence.
Who is eligible?
Any child under the age of 18 as of December 31st of the year the account is opened, with a U.S. citizenship and a valid Social Security Number, is eligible to open a Section 530A account. The child is the owner of the account, but an “Authorized Individual” (parent, guardian, or grandparent) manages it until the child turns 18.
How is it funded?
If your child was born between January 1st, 2025 and December 31st, 2028, they are eligible to receive a one-time deposit of $1000 from the government. Yes you read that right – it’s free money! Following the opening of the account, parents, grandparents, or anyone else can contribute up to $5,000 per year into the account. Moreover, your employer can contribute up to $2,500 into your child’s account. Unlike traditional IRAs, Section 530A accounts do not need to be funded with earned income, nor do they restrict contributions based on total income.
How are the funds invested?
Funds in the accounts will be invested in U.S.-based companies through low-cost mutual funds or ETFs.
What are the withdrawal rules?
No withdrawals are permitted until the year the child turns 18. After that, the account is subject to most of the same contribution and withdrawal rules that govern traditional IRAs – withdrawals will be taxed and penalties paid if distributed before age 59 ½.
What about taxation?
Contributions from individuals are made on an after-tax basis – aka, only the earnings on these contributions are subject to income tax and possible penalty upon withdrawal.
Contributions from other sources (like employers) are made on a pre-tax basis – aka, the full value of the contributions and earnings is subject to income tax and possible penalty upon withdrawal.
This sounds great! How do I open a Section 530Aaccount?
You can open an account directly through TrumpAccounts.gov.
The Treasury will begin processing contributions and the $1,000 free deposit on July 4th, 2026.
What is the difference between this and a 529 plan? Should I choose a Section 530A account instead of a 529?
529 Plans are still the best for education, since they are 100% tax-free when used for school. Think of Section 530A Accounts as a supplement to your child’s financial future – they can use the funds for anything – a first home, retirement, or more education. It is also a great way to teach kids about the importance of investing for the future and the power of compound interest.