Trump accounts launch in 2026: What to know about the $1,000 fund

Driving the news: Trump and the Treasury outlined this month what the sign-up process entails.

• Bank of New York Mellon became the first major financial institution to publicly get behind the accounts in December, matching the federal contribution for children of its U.S. employees.
• BlackRock soon followed with the same contribution for its workers.

Here's what to know about the accounts:

The children eligible for Trump accounts

State of play: Parents or guardians of children who are U.S. citizens born from 2025 through 2028 can elect to receive $1,000 from the Treasury.

• "Trump Accounts are built with strict safeguards to protect taxpayer funds, including requiring a valid Social Security number," the Treasury said.
• Kids born prior to 2025 can hold accounts, but they aren't eligible for the seed money from the Treasury.
• The benefit is available for children as long as the account is opened "before the year in which the child turns age 18."

Who can contribute to Trump accounts

Children, parents or guardians and employers can contribute to a Trump account, according to the Treasury.

• In the case of employers, the first $2,500 per employee per year is excluded from the employee's income.
• "Qualifying charitable organizations and Governmental entities (states, Tribes, localities, D.C.)" may also make contributions for all children in a "qualified class," the Treasury said, such as all children born in a year or all children in a state.

Annual contribution limits

A child's account can receive $5,000 per year in total from all sources, according to the Treasury.

• The Treasury's one-time $1,000 contribution does not count against that limit.

When contributions begin

Accounts may begin accepting contributions on July 4, 2026.

How to open a Trump account

Zoom in: Parents and guardians will need to file Form 4547 to make the election that establishes an initial Trump account for a child.

• Parents or guardians can also use Form 4547 to make an election for the $1,000 government contribution.
• After the election is made, beginning in May 2026, the Treasury "will send information to the individual who made the election to activate the account through an authentication process and complete the opening of the initial Trump account."

Employer contributions

Of note: Pre-tax salary-reducing contributions will be allowed for Trump Accounts owned by an employee's dependent child through an employer-sponsored "cafeteria" plan.

• "We expect hundreds of major companies to announce plans to contribute to these accounts in the coming months, and we had tremendous interest in that regard," Trump said last month.

By the numbers: BNY and BlackRock's matches could double the gains for eligible kids, depending on the market and timing.

• $1,000 invested in the S&P 500 18 years ago would be worth about $6,000 with dividends invested.
• $2,000 invested in late 2007 would be worth almost $13,000.

Where billionaire donations are going

Tech mogul Michael Dell and his wife, Susan Dell, recently pledged $6.25 billion to fund 25 million accounts.

• That donation extends the reach of the new child investment accounts beyond those who were born from 2025 to 2028.
• The Dells' money will give $250 in seed funds to 25 million children under age 10 who live in ZIP codes where the median household income is under $150,000.
• The Dells estimate that nearly 80% of U.S. children under the age of 10 will be eligible.

Billionaire hedge fund manager Ray Dalio followed up the Dells' contribution with $75 million of his own.

• His money will go to approximately 300,000 children in Connecticut.

When children can take out their money

When a child turns 18, their account will generally be treated as a traditional IRA under normal tax rules.

• Withdrawals made before the age of 59½ are subject to regular income tax — and could be subject to a 10% penalty unless an exception applies, including college tuition and a first-time home purchase (up to $10,000).