Your newborn could get $1,000 from the U.S. Treasury starting July

New law creates savings accounts for kids

The federal government will soon start putting $1,000 into savings accounts for newborns.

Trump Accounts, officially called Section 530A accounts, came out of the One Big Beautiful Bill Act, which became law on July 4, 2025. The U.S. Treasury deposits $1,000 for every child born between 2025 and 2028.

Any kid under 18 with a Social Security number can open an account, but only children born in that four-year window get the seed money.

The accounts officially launch on July 5, 2026, and about 600,000 families have already signed up.

Rules limit withdrawals until age 18

Families can put up to $5,000 a year into the account using after-tax dollars, and they can keep contributing until the year before the child turns 18.

Employers can chip in up to $2,500 a year per worker, and that money doesn’t count as taxable income. The funds go into low-cost index funds that track U.S. stocks, like the S&P 500, with annual fees capped at 0.1%.

Nobody can pull money out before the child turns 18, with a few exceptions, like rollovers. Once the kid hits 18, the account becomes a traditional individual retirement account.

Signing up runs through the IRS

Parents or guardians open an account by filing IRS Form 4547, either alongside their 2025 tax return or on its own. An online portal is expected to go live by mid-2026.

After filing, the Treasury will reach out starting in May 2026 to walk applicants through an identity check and activate the account.

The $1,000 government deposit won’t hit accounts before July 4, 2026, so families will need to wait even if they sign up early.

Dozens of companies pledge to match

Treasury Secretary Scott Bessent said at a Jan. 28 summit that close to two dozen companies had committed to matching the government’s $1,000 for their employees’ children.

By early February, that number had grown to nearly three dozen companies and donors, and it keeps climbing. Bessent said employer contributions to Trump Accounts could eventually become as common as a 401(k) match.

That’s a big promise, but the early momentum is real.

Big banks and tech firms lead the list

The financial industry makes up a big chunk of the list.

JPMorgan Chase, Bank of America, Wells Fargo, BlackRock, Charles Schwab, BNY, State Street, SoFi, Robinhood, and Coinbase have all signed on.

On the tech side, Intel, Broadcom, Nvidia, IBM, Dell Technologies, Comcast, Uber, Chipotle, and Charter Communications have pledged support.

Visa said it’s building a platform that would let credit card holders send cash-back rewards straight into Trump Accounts. Mastercard and the Investment Company Institute also joined.

Billionaire pledges add millions more

Michael and Susan Dell pledged about $6.25 billion to give $250 each to roughly 25 million children age 10 and under born before 2025 who live in ZIP codes where the median household income falls below $150,000.

Ray and Barbara Dalio pledged $250 per child for about 300,000 kids in Connecticut in similar income areas. Altimeter Capital CEO Brad Gerstner pledged $250 for each child under five in Indiana with a Trump Account.

Charitable and state contributions don’t count against the $5,000 annual cap.

White House projects big growth over time

The administration’s website projects the $1,000 seed could grow to about $6,000 by age 18 and roughly $243,000 by age 55, assuming no added contributions and historical S&P 500 returns above 10%.

The White House said families who max out yearly contributions could see balances near $1.1 million by the time the child turns 28.

President Donald Trump said at the summit that with modest contributions, accounts should reach at least $50,000 by age 18.

Financial experts question those numbers

Not everyone buys those projections. Alan Viard of the American Enterprise Institute, a conservative think tank, said the growth assumptions are too rosy because they don’t account for inflation or taxes.

Certified financial planner Douglas Boneparth said hitting seven figures by a child’s late 20s would mean maxing out contributions every single year with strong, uninterrupted market returns.

Some analysts project U.S. stock returns of only 3.1% to 6.7% annually over the next decade.

One wealth manager estimated a family putting in $2,500 a year at 9% returns could end up with about $282,000 after 28 years.

Critics worry lower-income families lose out

The NYU Tax Law Center said in a 2025 report that the accounts leave out the most vulnerable children from even modest benefits.

The Urban Institute pointed out that employer matches are concentrated at financial firms, where workers already earn higher incomes.

The Joint Center for Political and Economic Studies warned the accounts could widen the racial wealth gap because families who contribute the most gain the most.

If only the $1,000 seed sits untouched for 18 years, fees could eat into its value.

Critics also noted the broader law cut Medicaid and SNAP by more than $1 trillion, programs that many of these same families rely on.

Opt-in design could shut people out

Unlike some state baby bond programs, Trump Accounts aren’t automatic. Families have to choose to open one.

Ray Boshara of the Aspen Institute warned that the sign-up process, which runs through tax returns and online portals, may miss many lower-income families who don’t file taxes or simply haven’t heard of the program.

William Elliott, a professor at the University of Michigan, said the accounts can build wealth by pooling multiple streams of contributions, but only if families actually take part.

Grandparents can chip in with limits

Grandparents, other relatives, and friends can all contribute to a child’s Trump Account, but their money counts toward the $5,000 yearly cap.

One difference from 529 college savings plans: contributions to Trump Accounts don’t qualify for the gift tax annual exclusion, so contributors may need to file a gift tax return.

Financial experts recommend families compare Trump Accounts with other options like 529 plans and custodial brokerage accounts to figure out what fits their goals best.

Treasury plans more rules by mid-2026

The Treasury Department plans to propose rules on how employers can set up Trump Account contributions through payroll deduction. The online enrollment portal is expected to be fully operational by mid-2026.

Bessent predicted that up to 20 states may eventually contribute to the accounts and said the goal is 25 million participants.

Whether these accounts become a standard workplace benefit depends on the final regulations and how they stack up against existing savings tools on taxes.

This article was created with AI assistance and human editing.

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