New Trump Savings Accounts for Kids Launch with Federal Support

The Trump savings accounts, a federal initiative aimed at helping children save and invest, became available on July 4th. Over 6 million accounts have been opened for minors, with 1.4 million eligible for a $1,000 federal pilot contribution for newborns. However, this number represents only a small fraction of the millions of eligible children. The accounts, which function similarly to IRAs, allow contributions from parents and authorized adults, but withdrawals are limited until the child turns 18. Important eligibility criteria and contribution limits apply, making it crucial for families to understand the rules before opening an account.

Key Details: • Accounts opened starting July 4, 2023. • Eligible for children under 18 with a valid Social Security number. • Federal contribution of $1,000 available for newborns born between 2025-2028. • Annual contribution limit of $5,000 from family and friends; employer contributions capped at $2,500. • Accounts must invest in low-cost index funds with a maximum annual fee of 0.10%.