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More than 6 million Trump Accounts have been opened for American children since the program launched. Only about 1.4 million of those families have actually claimed the government's free $1,000 deposit.

 

That means millions of parents took the first step — and then stopped.

 

And that's before you factor in the outside money that's started flowing in. Last month, Gwynne Shotwell, president and COO of SpaceX, announced she was donating more than 2 million shares of the newly public company to children in lower-income areas, with emphasis on kids near central Texas. Michael and Susan Dell have pledged $6.25 billion to fund accounts of children under 10 in areas with median household incomes below $150,000. More than 50 companies — including Visa, Goldman Sachs, Uber, Comcast, and Micron — have committed to making contributions to their employees' children's accounts.

 

There's just one requirement to receive any of it: The account has to already exist.

 

If you have a child under 18 and haven't looked into this yet, here's what you need to know.

Also called a 530A account, a Trump Account is a tax-deferred investment account that can be opened for any child under 18 who has a valid Social Security number. They were created by the One Big Beautiful Bill Act, and the core idea is straightforward — to give children a head start on investing as early as possible, then let compounding do the rest.

 

By law, all funds are automatically invested in a single low-cost S&P 500 index fund — the State Street SPDR Portfolio S&P 500 ETF (SPYM). There are no investment choices to make; the account manages itself. Parents, family members, friends, and employers can all contribute, up to $5,000 per year total. The parent or guardian who opens the account serves as custodian until the child turns 18, at which point it converts into a traditional IRA.

 

The money in the account belongs to the child — not the parent.

The federal government is depositing $1,000 into the accounts of U.S. citizen children born between January 1, 2025 and December 31, 2028. Some eligible accounts have already seen that money arrive. If you signed up but haven't completed the activation process, check your email — the Treasury sends setup instructions from no-reply@trumpaccounts.treasury.gov.

 

Children born before 2025 are not eligible for the $1,000 government deposit, but they can still open an account. Given the outside contributions now coming in from employers and philanthropists, it's worth doing even without the starter grant.

 

The math on that $1,000 is worth spending a moment on. By some estimates, the deposit alone could grow to roughly $5,000 by the time the child turns 18. At retirement age — assuming historical S&P 500 growth rates of around 10% annually hold — Treasury Secretary Scott Bessent has projected it could reach "at least half a million dollars." The arithmetic checks out: $1,000 compounding at 10% over 65 years gets you to approximately $490,000. Time, more than the initial amount, is doing the heavy lifting. That's the whole bet the program is making.

The government deposit is just one piece. Since the accounts launched, a significant amount of private money has started flowing in — and the only way to access it is to have an open account.

 

The Dell family's $6.25 billion pledge will fund accounts of children under 10 in lower-income areas. Micron Technology's $250 million commitment includes $250 contributions for children living in certain parts of states where the company operates, including Idaho, New York, Virginia, California, Colorado, Minnesota, and Texas. Shotwell's SpaceX share donation targets children ages 11–17 in lower-income areas near central Texas. The Treasury Department has also confirmed that philanthropists can donate stock directly to accounts — a significant expansion of what "contribution" can mean.

 

On the employer side, more than 50 companies have announced plans to contribute to their employees' children's accounts. Under the law, employers can contribute up to $2,500 per employee per year. The amount and structure vary by company — some may offer flat annual deposits, others may match employee contributions — so it's worth checking your own benefits package to see whether your employer is participating.

 

The consistent message from financial planners: even if you don't plan to contribute anything yourself, the account costs nothing to open, and having it set up means your child is eligible for contributions that would otherwise pass them by.

Trump Accounts follow traditional IRA-style tax treatment, not Roth-style. Here's what that means in practice:

 

- Contributions are made with after-tax dollars and are not tax-deductible.

- Growth is tax-deferred — meaning you won't owe taxes on gains while the money is in the account.

- Withdrawals are taxed as ordinary income when distributed.

 

Early withdrawals before age 59½ are generally restricted, but can be made penalty-free for qualifying expenses like college costs or a first home purchase — though those withdrawals are still subject to income tax.

 

If you're weighing this against a 529 account, the key difference is on the back end: 529 withdrawals used for qualified education expenses come out completely tax-free, which is a meaningful advantage if you're specifically saving for college. Trump Accounts are more flexible long-term — they become a full retirement vehicle at 18 — but less tax-efficient for education spending specifically. The two accounts serve different purposes and aren't necessarily an either/or decision.

 

One limitation worth noting: Trump Accounts currently invest only in U.S. equities. Some financial planners flag the lack of bond exposure as a drawback, particularly for teenagers who might otherwise begin shifting toward a more conservative allocation.

To open a Trump Account, parents or guardians need to complete IRS Form 4547 — the tax form created specifically for this program. The form is available at IRS.gov. There's also an official app and a website (TrumpAccounts.gov) that work alongside the form, but the IRS filing is the required starting point. It's free to sign up.

 

For newborns, the Social Security Administration is rolling out a process to automatically enroll babies into Trump Accounts — a change that should make this easier for new parents going forward.

 

For parents of children born between 2025 and 2028: Yes, and sooner rather than later. The free $1,000 deposit is the most straightforward argument, but the window on that money will eventually close, and the compounding advantage of starting early diminishes the longer you wait.

 

For parents of children born before 2025: Sure, the case is less obvious, but it's still worth considering. The SpaceX donation, the Dell and Micron pledges, and the growing list of employer contributions all share the same fine print — your child needs an account to receive them. Opening one costs nothing and creates optionality that not having one forecloses entirely.

 

The program is still early. Rules may change, employer participation will evolve, and it remains to be seen how large the outside contributions ultimately become. But for a free account that takes minutes to open, the downside of having one is essentially zero.