What Is a Trump Account? Everything You Need to Know About How to Open an Account, Their Tax Benefits, and Michael and Susan Dell’s Donation.

The Trump Account has turned out to be one of the biggest (and quietest) financial developments of 2025. It’s a tax-incentivized savings program designed to help families build long-term savings from the day a child is born. The account’s eligibility requirements are fairly inclusive, and there are a few core benefits that are hard to say no to.

But the real bonus is that the government is offering a one-time deposit of $1,000 to get your child’s new account started. And thanks to an absolutely colossal donation from Michael and Susan Dell, low and middle-income families should get an extra $250 boost.

So, how exactly does the Trump Account work? And more importantly, does it really offer meaningful value for struggling parents?

Let’s take a closer look.

What Is a Trump Account?

Before we dive right into the tax benefits of the Trump Account, it’s worth taking a moment to talk logistics.

The Trump Account is a new stock market investment account that was created by legislation that President Donald Trump signed into law earlier this year. It’s open to children under 18, and it’s essentially a long-term and child-oriented custodial account designed to encourage families to save for their kids from infancy through to adulthood.

The government is stating that parents will be able to open an account on behalf of their children starting in early 2026, but an exact go-live date hasn’t been announced. You can then begin making deposits from July 4, 2026.

Here are the account’s core features:

• Eligibility: The Trump Account is open to any child under 18, as long as they’re U.S. citizens with a valid Social Security Number (SSN).
• Investment structure: The money you deposit into a Trump Account gets invested in low-cost mutual funds or exchange-traded funds (ETFs) that track broad U.S. equity indexes.
• Contribution rules: Family members, friends, employers, and charitable organizations can all contribute to a child’s Trump Account. There’s an annual contribution limit of $5,000 per child per year in private contributions. Employers can contribute up to $2,500 per employee per year, which is counted toward your annual $5,000 cap.
• Withdrawal rules: The funds you deposit can’t be withdrawn until the child turns 18 (unless you’re rolling over to a similar account elsewhere). After that, withdrawals are subject to standard IRA-style distribution rules, and early withdrawals will incur tax penalties.
• Account fees: The account is relatively low-cost. There’s no joining fee, and management fees are legally capped at 0.10% per year.

But here’s the part new parents will want to read: To boost uptake, the U.S. Treasury is offering a one-time deposit of $1,000 into each Trump Account for eligible children born between January 1, 2025 and December 31, 2028. You’ve just got to make sure you fill out the proper election form (IRS Form 4547) to make sure your child is included.

This election form hasn’t been finalized yet, but the IRS has said it’ll go live soon.

What Are the Tax and Financial Benefits of a Trump Account?

The number one benefit of the Trump Account is this government-funded seed initiative. 

All newborns from 2025 to 2028 are eligible for a $1,000 initial deposit. This deposit won’t be included in your annual contribution cap, and so it’s essentially just “free money.”

Beyond this free seed money, the Trump Account offers tax-deferred growth.

Like a traditional IRA, all the investment earnings accumulated through dividends or interest aren’t taxed as long as they stay in your child’s Trump Account. This enables the beneficiary to compound those gains over many years, resulting in a more substantial fund size.

Then, you’ve got the investment structure itself. 

The Trump Account requires that money be invested in low-cost index funds or ETFs. This means equity exposure for your kids, which should deliver higher long-term returns than you’d get with a traditional savings account. There’s also a legal limit to account fees, which should help to maximize your child’s net returns.

Finally, the Trump Account has some pretty broad contribution options that parents will find useful. Like a custodial account, grandparents, friends, and even employers can contribute to your child’s Trump Account. Employers can put in up to $2,500 tax-free, providing an additional incentive for working parents.

So, there’s a lot of good to shout about here. But it’s important to acknowledge that the Trump Account isn’t perfect, and does have a few drawbacks.

First and foremost, it’s not actually that special. Withdrawals are restricted until your child turns 18, and it works pretty much the same as any other IRA or custodial account. You’re also losing some flexibility if you put all your eggs in the Trump Account basket. Investment accounts like 529s have simpler withdrawal rules and a bigger tax advantage.

Finally, the Trump Account isn’t open to everyone. The government’s generous seed money isn’t means-tested, but you can only open an account for your child if they’re a U.S. citizen with a valid SSN. That will not apply to all families living in America.

But generally speaking, the Trump Account is a pretty decent proposition for eligible families who are willing to commit to long-term investing (and want a big signing bonus).

How to Open a Trump Account

If you’re keen to set up a Trump Account, you’ll have to hold your horses. Despite all the excitement, the government hasn’t quite finalized all the logistics.

To set up an account, parents or guardians must file IRS Form 4547. This is the election form that opens up a Trump Account on behalf of a child and serves as the claim to your child’s Treasury-funded deposit (if they’re eligible).

The IRS has finished a draft version of Form 4547. But as of right now, that form hasn’t been rubber-stamped or made public. This is expected to happen in early 2026.

To stay in the know, your best bet is to keep checking back on the government’s official site for Trump Accounts.

After the form goes live and you’ve made your election, the Treasury should contact you directly with information about the authentication process to complete account activation. The government has said activations are on track to start in May 2026. Contributions can then be made beginning July 4.

Just remember: Although this is a national program that’s eligible to many U.S. families, enrollment isn’t automatic. You need to actively choose to participate and open an account for your child to get your initial $1,000 deposit.

Michael and Susan Dell’s $6.25 Billion Donation: What It Means

The government isn’t funding this entire investment initiative on its own. Last week, billionaire philanthropists Michael and Susan Dell pledged a whopping $6.25 billion top up the Trump Accounts program. 

But instead of going towards the government’s initial $1,000 deposit for newborns, the Dells' contribution is designed to help older kids living in less affluent parts of the country. It will provide an additional $250 for all kids under 10 living in ZIP codes where the median income is below $150,000.

Translation: If your child is eligible, they’ll get $250 in seed money even if they were born outside that 2025-2028 window. That should be great news if you’re living in a lower-income area, and it offers an extra incentive to get your child signed up when registrations go live in 2026.

At the end of the day, the Trump Account isn’t a particularly innovative idea. 

It’s basically just a plain old IRA you can open for your kids. And if your household finances are already stretched and you’re struggling to save for the future, a Trump Account won’t instantly turn things around. It’s a slow-burner, and you’ll need to make your own contributions over time to create something decent you can pass on to your children.

But if you’re looking for a low-risk way to set up an investment account for your kids and want (at least) $1,000 worth of free cash, the Trump Account is definitely worth filling out a quick form or two.