Trump Accounts to Fund $1,000 for Newborns

Under President Donald Trump's One Big Beautiful Bill Act, all American babies born between January 1, 2025, and December 31, 2028, will receive a $1,000 federally funded 'Trump Account' investment account. The program, set to roll out in 2026, allows for after-tax contributions up to $5,000 annually from parents, relatives, or employers and restricts investments to low-cost U.S. stock market index funds. Accounts grow tax-deferred and are modeled on custodial IRAs, with withdrawals before age 59½ generally subject to taxes and penalties, except for qualified education or first-time home purchases. The Treasury Department will oversee the program, which is projected to cost $15 billion by 2034. While the initiative aims to enhance long-term financial security for children, experts caution about its complexity, inflexible rules, and uncertain benefit for average families compared to existing savings vehicles. Some advisers note the accounts may particularly favor wealthier families who already maximize other investment options.