Trump Accounts Benefits: 7 Reasons to Open One

Trump Accounts offer several key benefits for families: a free $1,000 government deposit, no income restrictions, tax-deferred growth in low-cost S&P 500 index funds, employer matching up to $2,500/year, and flexible use once your child turns 18. Here is a closer look at each benefit and what it means for your family.

1. Free $$1,000 Federal Deposit

Every U.S. citizen child born between 2025 and 2028 receives a $1,000 one-time federal deposit into their Trump Account. This is real money from the government. You do not need to pay it back.

Parents must opt in by filing IRS Form 4547 with their tax return or through the trumpaccounts.gov portal. The deposit is not automatic. See our step-by-step guide to opening a Trump Account for exactly how to claim it.

Even if you never add another dollar, the $1,000 deposit invested in the S&P 500 could grow to roughly $5,500 by age 18 at historical average returns. That is free money working for your child.

2. No Income Limits

Unlike many government programs, Trump Accounts have no income restrictions. A family earning $30,000/year and a family earning $1 million/year both qualify on the same terms.

The only requirements are:

• The child must be a U.S. citizen
• The child must have a valid Social Security Number (SSN)
• The child must be under 18 at the end of the election year

That is it. No means testing. No phase-outs. No complicated income calculations. Check your child's eligibility with our eligibility checker.

3. Tax-Deferred Growth

During the growth phase (birth through age 18), you pay zero taxes on investment gains. The money compounds without being reduced by annual capital gains taxes or dividend taxes.

This matters more than most people realize. In a regular taxable brokerage account, you owe taxes every year on dividends and any capital gains from fund rebalancing. Over 18 years, those taxes drag down returns significantly.

The tax-deferred advantage can add $12,000-$24,000 to your child's account over 18 years at maximum contributions. For a full breakdown of how gains are taxed after age 18, read our taxation guide.

4. Employer Matching Up to $2,500/Year

Your employer can contribute up to $2,500 per year to your child's Trump Account, tax-free under IRC Section 128. This contribution:

• Does not count as taxable income on your W-2
• Is tax-deductible for the employer
• Counts toward the $5,000 annual cap on the child's account

Think of it like a 401(k) match for your child. If your employer contributes the full $2,500, your family can still add up to $2,500 more from personal contributions to reach the $5,000 cap.

5. Low-Cost Index Fund Investing

Trump Account funds must be invested in mutual funds or ETFs tracking the S&P 500 or a broad U.S. equity index. Expense ratios are capped at 0.1% (10 basis points).

That means you pay no more than $1 per year for every $1,000 invested. Compare that to:

Low fees are one of the biggest predictors of long-term investment success. Over 18 years, even a 0.5% fee difference can cost thousands. Trump Accounts lock in some of the lowest fees available anywhere. See our detailed fee breakdown.

6. Flexible Use at Age 18

At age 18, the Trump Account converts to a traditional IRA. From that point, the money can be used for anything:

• College or trade school — see details
• First home purchase — up to $10,000 penalty-free under IRA rules
• Starting a business
• Long-term retirement savings
• Any other purpose

Unlike a 529 plan, which penalizes non-education withdrawals, Trump Account money has no use restrictions once it becomes an IRA. Withdrawals are taxed as ordinary income, but there are no extra penalties for using the money for non-education purposes.

For more on how the IRA conversion works, see what can Trump Account money be used for.

7. Dell Foundation Bonus ($250)

Michael and Susan Dell pledged $6.25 billion to add $250 per qualifying child to their Trump Account. Your child qualifies if:

• They are under age under 10
• They live in a ZIP code with a median household income below $$150,000

The $$150,000 threshold covers the vast majority of American ZIP codes. Combined with the federal deposit, a qualifying newborn starts with $1,250 before any family contributions. Read the full details in our Dell pledge explainer.

Are There Any Downsides?

No financial product is perfect. Here are the tradeoffs you should know about:

For most families, the benefits far outweigh these drawbacks. The locked-in growth period is a feature, not a bug — it ensures the money compounds without temptation to withdraw early. And the tax-deferred S&P 500 investment with capped fees is better than what most adults get in their own retirement accounts.

To see how much your child's account could grow, try the Growth Calculator. To check if your child qualifies, use the Eligibility Checker.