President Donald Trump announced the creation of a government-backed investment account for children under 18 as part of the sweeping budget bill he signed into law on July 4, 2025.
The so-called “Trump Account” is scheduled to be available on July 4, 2026, and parents of U.S. citizens born between 2025 and 2028 will be able to opt-in for a $1,000 initial deposit from the federal government.
Michael Dell, the billionaire CEO of tech company Dell, and his wife, Susan, pledged $6.25 billion on Dec. 2 to give children under 10 in certain zip codes a $250 initial deposit when a family member opens an account on their behalf.
Although Trump Accounts are not explicitly designed for college savings, they offer similar benefits to 529 college savings plans. For example, beneficiaries of Trump accounts may be able to use funds in the account for higher education expenses without early withdrawal penalties.
However, once the beneficiary turns 18, the account is transferred to an individual retirement account, which is subject to IRA rules and tax benefits.
The plan, named after a section of the tax code, was created in 1996 to help families save for their children’s higher education costs. The plan is a state-sponsored investment account that offers tax benefits, including state income tax-deductible contributions and tax-free withdrawals for qualified expenses.
“Basically, any way that people can save money is good, whether it’s a 529 account, a Trump account, a Roth IRA, a (health savings account),” said Michael Green, a certified financial planner with Apollon Wealth. “They’re all great tools. It comes down to what people are trying to accomplish, what their goals are, and what their ability to save is.”
While some details about Trump’s account are still unclear, the Internal Revenue Service has released some guidance on how the account will work. Here are some of the key differences between Trump accounts and 529 savings plans.
