In July of 2026 a new account is coming to market. The U.S. Treasury opens the doors on a brand new savings account designed specifically for children: the "Trump Account."
We've already received a few questions from clients asking, "Is this real?" "Is it just for the super wealthy?" "How do I open an account?" And I expect that number to grow exponentially once families realize there's free money on the table.
As financial planners, we live for the details. We want to know how this fits into your cashflow, your long term financial capacity, and your goals. So, I dove into the IRS and Treasury Department guidance. We also have new analysis coming out of the planning community to give you the plain English version before July arrives.
Here is the bottom line: Grab the free money, but be very careful before you add your own.
Let's break it down.
Think of it as a government sponsored "Investment Account" kinda like a Traditional IRA.
Officially established under the One Big Beautiful Bill Act (yes, that is the real name), a Trump Account is a tax deferred investment account designed to build wealth for the next generation of American kids.
The headline feature? "Seed Money."
If you have a child or grandchild born between January 1, 2025, and December 31, 2028, the U.S. Treasury will deposit a one time $1,000 "seed" contribution into their account. That is straight up free money to get the compounding snowball rolling.
If you have kids born prior to this time window, you can open an account for your child, but they will not qualify for seed money.
Unlike a 529 plan which is specific to education, the Trump Account is a bit more broad, but it comes with strict guardrails.
This is where you need to be patient. You cannot open one today, but you need to act soon.
Here is where the financial planning rubber meets the road. Should you use this account?
If you have a qualifying child or grandchild (born 2025 through 2028), absolutely open the account to get the $1,000 government grant. You should never walk away from a free $1,000. That's a gift that will grow for decades.
While the tax deferral sounds nice, recent analysis from leading financial planning experts suggests these accounts might actually be a tax trap compared to other options.
Here is why: When your child eventually takes money out of a Trump Account, that money is taxed as Ordinary Income (the highest tax rates).
If you invested that same money in a standard Taxable Custodial Account (UTMA/UGMA) - which you may already be familiar with -
You can take advantage of the "Kiddie Tax" rules, which currently allow a child to realize about $2,700 of gains tax free every single year. Trump Accounts don't get this perk.
When they eventually sell investments in a taxable account, they pay Capital Gains Tax rates, which are significantly lower than Ordinary Income rates.
The Trump Account turns low tax capital gains into high tax ordinary income. It also locks up the money with less flexibility than a regular brokerage account.
Open the account to get the government's $1,000. But for your own savings contributions, you are likely better off using a 529 Plan (for college) or a standard Taxable Custodial Account (for flexibility and better tax rates).
You aren't alone. Between 529s, UTMAs, Roth IRAs for kids, and now Trump Accounts, the "alphabet soup" of saving for children is getting thick.
For grandparents especially, you want to make sure you are using the right tools. You've worked hard to build wealth, and you want to pass it on wisely.
Be sure to schedule a meeting to if you are interested in putting money to work for your children or grand children.
We can provide the best ways to save and invest for children, breaking down the pros and cons of every account type so you can pick the right bucket for your family.
Click here to schedule a call with our team. Let's make sure you're ready when July arrives.
US Treasury Announcement: Treasury & IRS Guidance on Trump Accounts (IR 2025 117)
Official Portal: TrumpAccounts.gov
Deep Dive Analysis: Why Taxable Custodial Accounts Are Better Than Trump Accounts (Kitces.com)
Find a CFP: LetsMakeAPlan.org
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