Trump Accounts: Not the only investment option for your kid’s future
The Trump Accounts, which are designed to save for American children's futures, can be a good start. But what if your family isn't eligible for it, or you can't get the $1,000 deposit that jumpstarts it? Luckily, there are options you can use either alongside or in lieu of the program if your family simply doesn't qualify. In this article, Finder shares what you need to know about Trump Accounts and other investment options.
Who can open a Trump Account?
Trump Accounts officially launched on July 4, 2026. They’re tax-advantaged investment accounts for American children with a Social Security number (SSN), and they’re long-term retirement accounts.
Created under the "One Big Beautiful Bill," the Trump savings accounts are technically an individual retirement account (IRA). Once the child turns 18, the account converts into a traditional IRA.
According to TrumpAccounts.gov, all U.S. children under 18 with a valid SSN are eligible to establish a Trump Account. Parents or legal guardians can open and manage accounts on behalf of their children, and once the kid turns 18, they get control over the funds.
To get the investment account, you must download the Trump Accounts app on either the Apple App Store or Google Play.
Who gets the $1,000 in the Trump savings account?
American children born between Jan. 1, 2025, and Dec. 31, 2028, get $1,000 automatically deposited in the account once established. The $1,000 is a one-time contribution from the U.S. Department of the Treasury.
Aside from just the $1,000, custodians of the account can add up to $5,000 per year.
How much can a Trump Account grow?
A Trump Account can grow quite a bit. As tax-advantaged accounts, and with the ability to contribute up to $5,000 per year, passive growth can add up.
With just the $1,000 deposit, assuming a conservative 7% annual return, a $1,000 deposit could grow to approximately $3,380 by age 18 without any additional contributions. Not too shabby for a contribution you didn’t have to fund.
Things to consider about the Trump savings account
The Trump Accounts are long-term retirement accounts, not specifically college education or traditional savings accounts. However, the child may be able to use the funds for things other than retirement.
Once the child turns 18, standard IRA rules kick in for the Trump savings account. This means withdrawals from the Trump savings account before age 59 1/2 usually come with income tax plus a 10% penalty — unless they are used for specific things.
According to the Trump Account site, the IRA’s funds can be accessed without penalty when the child turns 18 for qualified expenses. A few things are listed, like education and a first home purchase. Other than qualified expenses, withdrawals would be taxed at ordinary income rates.
Additionally, kids born before 2025 don’t qualify for the federal deposit of $1,000, so parents and guardians with older kiddos will have to fund the account on their own.
4 alternatives (or additional) options to consider
As the Trump savings account is a long-term retirement account, here are alternative and/or additional savings options for kids.
1. 529 savings for education
Similar to the Trump savings account, a 529 plan is a tax-advantaged account. However, there are some major differences in how they work and what they're made for.
529 savings plans are designed for education expenses. Contributions grow tax-free if used for qualified expenses, and many states have tax deductions or credits for 529 savings contributions. On top of all that, 529 plans have no contribution limits, unlike the Trump Account’s $5,000 yearly cap.
While earnings grow tax-free, and they are only tax-exempt if the funds are used for qualified education expenses.
2. UGMA/UTMA custodial brokerage account
Uniform Gifts to Minors Act (UGMA) accounts and Uniform Transfers to Minors Act (UTMA) are custodial brokerage accounts. UTMA and UGMA accounts allow you to invest in stocks, ETFs and other assets for your child, and then once they're of age, they can access the account and use the funds or assets for pretty much anything they like.
UGMA accounts allow you to transfer financial assets like cash, stocks, bonds and mutual funds. Similar, but not exactly the same, UTMA accounts can hold a wider range of assets, including real estate and other property. The exact structure of these accounts can depend on your state.
For UGMA/UTMA accounts, the money can go toward pretty much anything; the funds are not limited to education or retirement. There’s no federal cap on contributions like there is with a Trump Account.
3. High-yield kids’ savings account
For simpler, shorter term goals, a high-yield savings account still earns its spot.
There are many options without monthly fees, joint ownership, full access whenever the kid might need it, and long-term growth with high rates. Many high-yield savings accounts have rates around 4% APY with no monthly fees, no contribution limits and come with the standard $250,000 federal deposit insurance.
4. Custodial Roth IRA
If your teen already has a part-time job, a custodial Roth IRA could be a great option. You fund a Roth IRA with dollars that have already been taxed, and qualified withdrawals are tax-free.
Roth IRAs are ideal for those who think they'll be in a higher income tax bracket when they retire.
Contributions are limited to what the child/teen would actually earn, but qualified withdrawals in retirement come out completely tax-free, which can beat the tax-deferred (but eventually taxable) growth inside a Trump Account.
Bottom line
These new Trump Accounts can offer free federal money in a tax-advantaged account; but with this free money, there are restrictions, and of course,not everyone can get their hands on it.
Eligibility for that flagship $1,000 first contribution is narrow. And the account itself is designed for long horizon retirement savings, and only certain expenses qualify for penalty-free withdrawals.
For most families, layering may be the smart move. Grab the free money if your child qualifies, or at the very least consider opening the account and depositing what you can, and then consider pairing it with another savings account for any other future needs.
This guide has been edited by Richard Laycock and reviewed by Matt Miczulski.
This story was produced by Finder and reviewed and distributed by Stacker.
