President Donald Trump's Trump Accounts program, launching July 4, will provide a $1,000 federal deposit for children born between 2025 and 2028. The accounts, also known as 530A accounts, are tax-deferred investment vehicles for children under 18. Employers, including Goldman Sachs, Morgan Stanley, Bank of New York Mellon, BlackRock, and others, have pledged to match the federal contribution for their employees' children.
Investment Options and Rules
The U.S. Department of the Treasury announced that contributions will be invested in exchange-traded funds (ETFs) from State Street, BlackRock, and Vanguard. The default option is the State Street SPDR Portfolio S&P 500 ETF (SPYM), which tracks the S&P 500. Parents, guardians, and others can contribute up to $5,000 annually after July 4. The funds are locked until the child turns 18 and can only be used for specific purposes, such as education or home purchases.
Philanthropic Support
Billionaires like Michael Dell and his wife, Susan, have pledged additional funding. The Dells committed $6.25 billion to accounts for children who do not qualify for the federal $1,000 deposit.
Employer Participation
A growing list of companies, including Charter Communications, Chipotle Mexican Grill, Comcast, Intel, JPMorgan Chase, Micron Technology, Robinhood, and SoFi, have joined the initiative. David Solomon, CEO of Goldman Sachs, emphasized the importance of early investing for long-term financial security.
Investment Strategy
While the accounts offer 100% equity investment options, Vanguard noted that they do not gradually shift to bonds as other accounts, like 529 college savings plans, typically do. This approach may carry higher risk but also potential for greater returns over time.