By now, you may have heard about 530A accounts, officially known as Trump Accounts. These are new, tax-advantaged savings vehicles designed for minor children. They were signed into law in 2025 and are launching on July 4, 2026.
While some details are still being finalized, enough is known to understand where these accounts might fit in your—and your child’s—financial plan.
What Are Trum Accounts and Why Do They Matter?
For many years, families have had limited options when it comes to tax-advantaged savings for their children. Custodial accounts allow you to invest on a child’s behalf, but they’re generally taxable. A 529 plan offers tax advantages, but funds must be used for educational expenses only. And while kids can contribute to traditional and Roth IRAs, they need earned income to do so—something many children simply don’t have.
Trump Accounts aim to fill that gap. Structurally, they are a type of custodial account. That means that they’re owned by the child but administered by an adult until the child reaches age 18. They provide tax-advantaged growth without restrictions on how funds can be used once they’re withdrawn. And they don’t require children to have earned income.
For some children, there will be a built-in head start. Children born between Jan. 1, 2025, and Dec. 31, 2028, are eligible for a one-time federal contribution of $1,000 to be deposited directly into their 530A accounts. In addition, up to 25 million children age 10 or younger who live in zip codes with median incomes below $150,000 may receive a separate $250 deposit through a charitable contribution from the Michael & Susan Dell Foundation.
How Do They Work?
While some aspects of 530A accounts are still in flux, the broad framework is clear.
- Accounts can be opened by parents, legal guardians, adult siblings or grandparents, provided the child has a Social Security number and is younger than 18 on Dec. 31 of the year the account is opened. Family members can open accounts online or by filing IRS Form 4547. Contributions can be made until the child turns 18.
- The annual contribution limit is capped at $5,000. The $1,000 government seed contribution that some children are eligible for doesn’t count toward the annual limit. For minors who do have earned income, contributing to a 530A account doesn’t prevent contributions to a traditional or Roth IRA.
- Investment options within 530A accounts will likely be limited. The government is expected to offer a narrow menu of low-cost funds, similar to its approach to federal employee retirement accounts.
- Individual contributions are not tax-deductible, but growth inside 530A accounts is tax-deferred. Employers can offer matching contributions, which are tax-deductible up to $2,500 and count toward the annual limit. Taxes are only owed when funds are withdrawn. Earnings in the account, as well as any employer and government contributions, will be taxed as ordinary income.
- Withdrawals can’t be made until the child turns 18. Beginning that year, the account resembles a traditional IRA, including a potential 10% penalty for withdrawals before age 59 ½.
What Are the Long-Term Benefits?
When used thoughtfully, this new savings vehicle can help build a stronger, more flexible financial foundation over time. What’s more, these accounts can work in tandem with other savings vehicles such as 529 plans and IRAs to give children an even bigger financial leg up.
If your child qualifies for the $1,000 federal seed contribution, opening an account costs you nothing and gives your child a head start on long-term savings. After all, time is one of the most powerful elements behind compound growth. Over time, that $1,000 can grow into a substantial amount—especially if you continue to contribute.
Over 60 years, the initial $1,000 contribution could grow to nearly $58,000, assuming a 7% annual growth rate. That’s not bad. But with an added $50 a month, that same account could be worth nearly $550,000 after 60 years.
If you have questions about opening a 530A account, please reach out. As always, we’re happy to help.
Denver Private Wealth Management is an independent fee-based financial planning practice with 80+ years of experience in the financial industry. DPWM customizes portfolios based on your financial goals and works closely with you, your tax advisors and estate attorneys to form a comprehensive view of your financial situation. For more information or to set up a free consultation, contact us at info@denverpwm.com.
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The information contained in this post is for general information purposes only. The information is provided by Quick Take: What to Know about Trump Accounts and while we endeavour to keep the information up to date and correct, we make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
Graham Ditus
Tim Kulick, CPA®
Drew Kelleher, CFP®
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