Learn how the new Trump Account, or an IRC § 530A account, could help build long-term wealth for your kids. Discover contribution limits, rules and if your child is eligible for the $1,000 federal match.
Article: 4 minutes
Updated: June 29, 2026 Published: June 29, 2026
By: USAA Reviewed by: Editorial contributors
A Trump Account, or an IRC § 530A account, is a tax-advantaged investment account for American children. Eligible children can receive up to $5,000 in annual contributions, and those born between 2025 and 2028 may be eligible for a one-time $1,000 federal seed deposit. Funds grow tax-deferred and after the child turns 18, function like a traditional IRA.
Starting July 4, 2026, the federal government will begin offering a new way for families to start their children’s long-term savings early. The IRC § 530A accounts, also known as Trump Accounts, are tax-advantaged savings accounts established by the One Big Beautiful Bill Act. Trump Accounts can only be opened for children younger than 18. Contributions aren’t tax deductible, but they grow tax-deferred until they’re withdrawn.
As you weigh all your options to help save for your children’s financial futures, you may be wondering how these new Trump Accounts compare to your other options, like 529 education savings accounts, UTMA or UGMA accounts and more. Here, we’ll review what you need to know about Trump Accounts Opens in a New Window. See note 1
Trump Accounts are a new type of individual retirement account for American children under the age of 18. Think of a Trump Account almost like a Traditional IRA for kids, meant to boost early saving.
An adult, typically a parent or legal guardian, can open a Trump Account through the U.S. Treasury Department and manage it until the child turns 18. At that point, the account is all theirs and is treated similar to a Traditional IRA.
Unlike a Traditional IRA, however, a Trump Account has a limited selection of approved investments, primarily index-tracking mutual funds and ETFs of U.S. equities, and, with few exceptions, the money cannot be accessed until January of the calendar year the child turns 18.
Trump Accounts are available to any American child with a valid Social Security number. Children can only have one Trump Account, and a Trump account can only be opened for a child who is younger than 18. That means kids must have been born in 2009 or later for elections made in 2026. No earned income is required, unlike custodial Traditional IRAs.
To launch Trump Accounts, the federal government is offering one-time seed contributions of $1,000 for eligible kids born from 2025 to 2028.
Whether your child is a newborn who is eligible for the $1,000 seed contribution or a teen below age 18, a Trump Account could give them a head start on retirement saving with the $5,000 annual contribution limit. And don’t forget the gift of time: The earlier they start saving for retirement, the better.
For 2026 and 2027, contributions are capped at $5,000. That total does not include contributions from the federal government, states, tribes, certain nonprofit groups and qualified rollovers. Starting in 2028, the contribution limit will be indexed for inflation. Personal contributions are not tax-deductible.
Unlike some other savings vehicles, multiple people can contribute to a Trump Account. That includes:
During the growth period, or before the child turns 18, Trump Account investment options are limited to index-tracking mutual funds and ETFs of primarily U.S. equities.
Withdrawals are generally not allowed before the beneficiary turns 18. At that point, the child takes control of the account, and it is treated similar to a Traditional IRA, with standard IRA withdrawal rates and penalties.
Withdrawals are permitted in a few rare circumstances, primarily if the child beneficiary dies, or excess contributions need to be corrected. In the year the child turns 17, the funds can be rolled over into an ABLE account, or an Achieving a Better Life Experience account for individuals with disabilities. You can also withdraw the money for a trustee-to-trustee rollover.
Parents thinking about their young children’s financial futures may be wondering if the new Trump Account is a better option than existing savings plans, like a 529 college savings account. But the two are different and have different goals; a Trump Account is not meant to replace a 529 account. The Trump Account is basically a retirement account for kids, meant for long-term wealth building and retirement. A 529 plan is an education-specific savings account that lets you grow your money tax-free and does not tax withdrawals for education expenses.
You aren’t limited to one or the other. You can establish both for your child. But as you consider how to determine contributions for each or whether one might be a better fit for your family’s financial needs, consider these differences.
|
Primary purpose |
|---|---|
Trump Account |
General wealth building, retirement and long-term financial security |
529 savings account |
Funding qualified education expenses |
|
Contribution limits |
Trump Account |
$5,000 per year per child, indexed to inflation starting in 2028 |
529 savings account |
No federal annual limit, though contributions are subject to gift tax rules |
|
Government contributions |
Trump Account |
A one-time $1,000 federal match for children born from 2025 to 2028 |
529 savings account |
None |
|
Investment options |
Trump Account |
Restricted to mutual funds and ETFs of primarily U.S. equities |
529 savings account |
State-sponsored portfolios, typically mutual funds |
|
Withdrawal rules |
Trump Account |
Typically, withdrawals are prohibited before the child turns 18, when it then becomes the child’s and is treated similar to a traditional IRA. There are a few exceptions, like the death of the child. |
529 savings account |
Tax-free withdrawals are permitted at any age for qualified education expenses |
| Trump Account | 529 savings account | |
|---|---|---|
Primary purpose |
General wealth building, retirement and long-term financial security |
Funding qualified education expenses |
Contribution limits |
$5,000 per year per child, indexed to inflation starting in 2028 |
No federal annual limit, though contributions are subject to gift tax rules |
Government contributions |
A one-time $1,000 federal match for children born from 2025 to 2028 |
None |
Investment options |
Restricted to mutual funds and ETFs of primarily U.S. equities |
State-sponsored portfolios, typically mutual funds |
Withdrawal rules |
Typically, withdrawals are prohibited before the child turns 18, when it then becomes the child’s and is treated similar to a traditional IRA. There are a few exceptions, like the death of the child. |
Tax-free withdrawals are permitted at any age for qualified education expenses |
Primary purpose |
|
| Trump Account | General wealth building, retirement and long-term financial security |
| 529 savings account | Funding qualified education expenses |
Contribution limits |
|
| Trump Account | $5,000 per year per child, indexed to inflation starting in 2028 |
| 529 savings account | No federal annual limit, though contributions are subject to gift tax rules |
Government contributions |
|
| Trump Account | A one-time $1,000 federal match for children born from 2025 to 2028 |
| 529 savings account | None |
Investment options |
|
| Trump Account | Restricted to mutual funds and ETFs of primarily U.S. equities |
| 529 savings account | State-sponsored portfolios, typically mutual funds |
Withdrawal rules |
|
| Trump Account | Typically, withdrawals are prohibited before the child turns 18, when it then becomes the child’s and is treated similar to a traditional IRA. There are a few exceptions, like the death of the child. |
| 529 savings account | Tax-free withdrawals are permitted at any age for qualified education expenses |
A Trump Account must be established through the U.S. Treasury Department by filing IRS Form 4547 Opens in a New Window. See note 1 You’ll also want to download the official Trump Account app and create an account Opens in a New Window. See note 1
Because only one Trump Account can be opened per child, the IRS has established a priority order for who can make the official election to open an account:
To receive the pilot program seed contribution from the federal government, the request to open a Trump Account must come from someone who expects to claim the child as a qualified dependent for the tax year the election is made, typically a parent or legal guardian.
When used strategically, a Trump Account can encourage low-cost investing and retirement saving for children at a young age. But they have limits, like a low contribution cap and investment restrictions.
Pros |
$1,000 federal seed deposit for eligible children born from 2025 to 2028 |
|---|---|
Cons |
Investment options are heavily restricted, limited to index-tracking mutual funds and ETFs of primarily U.S. equities. |
Pros |
Employers can contribute up to $2,500 to an employee’s Trump Account, and it won’t count toward the employee’s taxable income, but does count toward the annual contribution limit |
Cons |
The annual contribution limit is relatively low, limited to $5,000. Indexing will begin in 2028. |
Pros |
Low-cost investment fees, capped at 0.1% |
Cons |
Contributions are not tax-deductible. |
Pros |
Encourages early investment compounding and long-term saving and investing habits |
Cons |
Distributions are generally not allowed during the growth period, and later withdrawals may have mixed taxable and nontaxable components. |
| Pros | Cons |
|---|---|
$1,000 federal seed deposit for eligible children born from 2025 to 2028 |
Investment options are heavily restricted, limited to index-tracking mutual funds and ETFs of primarily U.S. equities. |
Employers can contribute up to $2,500 to an employee’s Trump Account, and it won’t count toward the employee’s taxable income, but does count toward the annual contribution limit |
The annual contribution limit is relatively low, limited to $5,000. Indexing will begin in 2028. |
Low-cost investment fees, capped at 0.1% |
Contributions are not tax-deductible. |
Encourages early investment compounding and long-term saving and investing habits |
Distributions are generally not allowed during the growth period, and later withdrawals may have mixed taxable and nontaxable components. |
| Pros | $1,000 federal seed deposit for eligible children born from 2025 to 2028 |
|---|---|
| Cons | Investment options are heavily restricted, limited to index-tracking mutual funds and ETFs of primarily U.S. equities. |
| Pros | Employers can contribute up to $2,500 to an employee’s Trump Account, and it won’t count toward the employee’s taxable income, but does count toward the annual contribution limit |
| Cons | The annual contribution limit is relatively low, limited to $5,000. Indexing will begin in 2028. |
| Pros | Low-cost investment fees, capped at 0.1% |
| Cons | Contributions are not tax-deductible. |
| Pros | Encourages early investment compounding and long-term saving and investing habits |
| Cons | Distributions are generally not allowed during the growth period, and later withdrawals may have mixed taxable and nontaxable components. |
Contributions to a Trump Account are tax deferred. Your contributions grow tax-free over time, but they are fully taxable as regular income when they are withdrawn.
No, you generally cannot withdraw money from your child’s Trump Account before they turn 18. However, there are a few exceptions, like if the beneficiary dies.
When the account beneficiary turns 18, the account is all theirs and is treated similar to a traditional IRA account.