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Investment Structure

Trump Account Rules: Contributions, Investments & Withdrawals (2026)

Complete Trump Account rules: $5,000/yr limit, S&P 500 index funds only, 0.1% expense cap, no withdrawals before 18. The definitive rules reference.

TrumpAccounts.guide Editorial Team 7 min read
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Key Takeaways

  • Funds must track the S&P 500 or a broad U.S. equity index consisting primarily of U.S. companies.
  • Expense ratios are capped at 0.1% (10 basis points) — keeping costs minimal.
  • No leverage allowed — no borrowed funds or derivatives to amplify returns.
  • No cash, bonds, individual stocks, crypto, sector funds, or international-heavy funds permitted.
  • Trustees provide a menu of compliant options and designate a default fund (often an S&P 500 tracker).
  • At age 18, the account converts to a traditional IRA with standard investment rules.

Trump Accounts (IRC Section 530A) are designed for long-term, tax-advantaged growth for children under 18. They function like starter traditional IRAs with strict investment rules during the "growth period" — birth through age 18. These restrictions are intentional: they promote simple, low-cost, passive exposure to U.S. equities and harness compounding over 18+ years.

Whether you searched for "Trump Account rules," "Trump Accounts for kids rules," or "Trump Account investment rules" — this is the complete reference for every rule that applies during the growth phase.

ℹ️ August 2026 proposed regulations

IRS/Treasury published proposed eligible-investment rules on August 21, 2026 (FR 2026-17123). They flesh out the fee cap, leverage test, ESG exclusion, and trustee monitoring — proposed, not final. Plain English: proposed investment rules.

The Two Core Requirements

Every dollar in a Trump Account must satisfy two rules:

  1. Track a qualified index — The fund must follow the S&P 500 or another broad-market equity index consisting primarily (at least 90%) of U.S. companies.
  2. Stay below the expense cap — The fund's annual expense ratio cannot exceed 0.1% (10 basis points).

That is it. If a fund meets both requirements, it is eligible. If it fails either one, it is not.

Eligible Investment Types

Both mutual funds and exchange-traded funds (ETFs) qualify if they meet the statutory tests. For the official national Trump Accounts program, Treasury named these funds in sb0551:

Fund Ticker Approx. fee Index Status
State Street SPDR Portfolio S&P 500 ETF SPYM 0.02% S&P 500 Default at launch
iShares Core S&P 500 ETF IVV 0.03% S&P 500 Additional (later)
Vanguard Total Stock Market ETF VTI 0.03% CRSP US Total Market Additional (later)
State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF SPTM 0.03% S&P Composite 1500 Additional (later)
iShares Core S&P Total U.S. Stock Market ETF ITOT 0.03% S&P Total Market Additional (later)

Full lineup guide: Trump Account investment options. Side-by-side comparison: Best S&P 500 ETFs for Trump Accounts. Older articles that name VOO or SPY are describing the type of eligible fund — not the official program menu.

What Is NOT Allowed: The Full List

Trump Accounts enforce a 100% equity, U.S.-focused, passive index strategy. The following are explicitly ineligible:

  • Individual stocks — no picking Apple, Tesla, or any single company
  • Bonds or bond funds — no fixed-income investments of any kind
  • Cryptocurrency — no Bitcoin, Ethereum, or crypto ETFs
  • International-only funds — must primarily track U.S. equities (at least 90% U.S.-based under the safe harbor)
  • Sector funds — no tech-only, healthcare-only, or energy-only funds
  • ESG-focused index funds — excluded under the August 2026 proposed regulations (not final)
  • Target-date funds — unless they happen to meet both the index tracking and expense ratio requirements (most do not)
  • Actively managed funds — only passive index funds qualify
  • Real estate — no REITs or direct property investments
  • Cash or money market funds — you cannot park money in cash during the growth phase
  • Leveraged or inverse ETFs — no 2x, 3x, or short-selling funds
  • Alternative investments — no commodities, precious metals, or hedge fund strategies

⚠️ The no-leverage rule

Trump Accounts explicitly prohibit leverage — no borrowed funds or derivatives to amplify returns. This means leveraged ETFs (like SSO or UPRO) and inverse ETFs (like SH or SPXU) are not allowed, even though they may reference the S&P 500. The intent is steady, long-term compounding without amplified risk.

The 0.1% Expense Ratio Cap

Every eligible fund must charge an annual expense ratio of 0.1% or less — that is 10 basis points. In dollar terms:

Account Balance Max Annual Fee (0.1%) Typical Fee (0.03%)
$1,000 $1.00 $0.30
$10,000 $10.00 $3.00
$50,000 $50.00 $15.00
$100,000 $100.00 $30.00

The cap protects families from high-fee funds that would erode returns over 18 years. Most major S&P 500 and total market funds are well below the limit. For a deep dive on how fees compound over time, see our fees and expense ratios guide.

✅ Lower fees = more money for your child

The difference between 0.02% (SPYM) and a higher-fee S&P 500 ETF seems tiny year to year, but over 18 years on a growing account it adds up. Stick with the official low-cost lineup.

How Trustees and Custodians Work

Every Trump Account is held by a partner financial institution (trustee or custodian) authorized by the Treasury Department. The custodian:

  • Provides a menu of compliant fund options — you pick from their list
  • Designates a default investment (typically an S&P 500 index tracker) for accounts where no selection is made
  • Holds account assets and processes contributions
  • Reports activity to the IRS
  • Handles the conversion to a traditional IRA at age 18

Not every custodian carries every fund. Your choices depend on which institution holds the account. If your custodian offers several compliant options, compare expense ratios and pick the lowest.

Switching Between Eligible Funds

Parents (as the authorized individual) can switch between eligible index funds during the growth phase. Key points:

  • Switching within the account is not a taxable event — gains are not realized
  • You can only move between funds that meet both requirements (qualified index + expense cap)
  • There is no limit on how often you can switch, though frequent trading is unnecessary with passive funds

For full details on switching, see Can Parents Change Trump Account Funds?

What Changes at Age 18

On the beneficiary's 18th birthday, the Trump Account converts to a standard traditional IRA. This lifts all growth-phase investment restrictions:

  • Individual stocks, bonds, international funds, and real estate become available
  • The expense ratio cap no longer applies
  • Standard IRA contribution and withdrawal rules take effect
  • The beneficiary (now an adult) gains control of the account

This is a major transition point. For strategies on how to handle it, see our investment strategies guide and Roth conversion strategy.

📜 IRS Notice 2025-68 on eligible investments

"Amounts in a Trump Account must be invested in one or more funds (whether mutual funds or exchange-traded funds) that are designed to track the performance of the Standard & Poor's 500 Index or a broad-based domestic equity index."

In plain English: Pick an S&P 500 fund or a total U.S. stock market fund. Keep the fees under 0.1%. That is the entire investment requirement.

Why These Rules Exist

The restrictions force a 100% equity, U.S.-focused, passive index strategy — no active management, no diversification into bonds or international stocks during the growth years. The intent is to:

  • Maximize long-term compounding — historical U.S. stock returns (roughly 7–10% annualized) compound powerfully over 18 years
  • Minimize fees and complexity — ultra-low expense ratios mean more money stays invested
  • Protect families from bad choices — no speculative bets, no high-fee products, no chasing trends
  • Keep it simple — most families can set it and forget it with the default fund

Ready to decide which fund to pick and how to maximize growth? See our 5 Smart Investment Strategies for Trump Accounts.

Sources: U.S. Treasury Press Release sb0551, Federal Register 2026-17123, IRS Notice 2025-68. Educational content only — not tax or financial advice.

Frequently Asked Questions

Can I invest a Trump Account in Bitcoin or crypto?
No. Trump Accounts are restricted to mutual funds and ETFs that track the S&P 500 or a broad U.S. equity index. Cryptocurrency, crypto ETFs, and any non-index investments are not eligible.
Are target-date funds eligible for Trump Accounts?
Only if they meet both requirements: they must track the S&P 500 or a broad U.S. equity index, and their expense ratio must be at or below 0.1%. Most target-date funds do not qualify because they include bonds and international holdings.
What is a "broad U.S. equity index"?
A broad-based domestic equity index covers a wide range of U.S.-traded companies — not just the S&P 500. Examples include the total U.S. stock market (tracked by funds like VTI and ITOT), which holds thousands of U.S. companies across large, mid, and small caps.
Can I hold cash in a Trump Account temporarily?
No. All funds in a Trump Account must be invested in eligible index funds. There is no option to park money in cash, money market funds, or savings-like instruments during the growth phase.
What happens if my fund raises its expense ratio above 0.1%?
Under the August 2026 proposed regulations, trustees must monitor eligibility and generally dispose of an ineligible fund within 30 days. Official lineup fees sit well below the 0.1% cap. See our proposed investment rules explainer.

Related Articles

IRS Proposes Trump Account Investment Rules (2026)

Plain English: Aug 2026 eligible-investment NPRM — 0.1% fee cap, no leverage, ESG out, trustee monitoring. FR 2026-17123. Comments due Oct 20.

5 Smart Investment Strategies for Trump Accounts

At launch, stay in SPYM. Later choose among Treasury options. Maximize contributions, buy-and-hold, and plan the age-18 transition.

Trump Account Index Fund Requirements

Funds must track the S&P 500 or a broad U.S. equity index. Expense ratios capped at 0.1%. Official Treasury lineup: SPYM, IVV, VTI, SPTM, ITOT.

Best S&P 500 ETFs for Trump Accounts

Compare Treasury’s official lineup: SPYM (default), IVV, VTI, SPTM, and ITOT. Expense ratios, indexes, and what parents can choose when.

Trump Account Fees & Expense Ratios

Expense ratios capped at 0.1%. Official lineup fees for SPYM, IVV, VTI, SPTM, and ITOT — and why low costs matter over 18 years.

Can Parents Change Trump Account Funds?

Not yet at launch — money stays in SPYM until Treasury opens investment elections. Later you may choose among IVV, VTI, SPTM, and ITOT.

How Is a Trump Account Invested?

At launch, Trump Accounts default to SPYM (S&P 500). Treasury later adds IVV, VTI, SPTM, and ITOT. Index funds only; expense ratios capped at 0.1%.

Trump Account Investment Options: SPYM Default + 4 ETFs

Trump Account investment options in 2026: SPYM is the launch default. IVV, VTI, SPTM, and ITOT come later. You do not need to pick a fund to open.

Disclaimer: This is educational content, not tax or financial advice. Consult a qualified tax professional or financial advisor before making investment decisions.

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