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Trump accounts for babies are the most unexpected provision in the OBBBA. If your baby was born after January 1, 2025, the federal government will hand you a free $1,000 investment account for your child — no application, no income limits, no catch. It’s called a Trump Account (officially, a “Money Account for Growth and Advancement” or MAGA account), and it’s one of the most unusual provisions in the One Big Beautiful Bill Act.
The $1,000 goes into an index fund and grows tax-deferred until your child turns 18 (or up to 31 for education). At average market returns, that $1,000 could grow to $3,500-$5,000 by the time they’re ready for college or a first home. It’s not life-changing money on its own — but it’s free, it’s automatic, and combined with your own savings, it’s a head start most families shouldn’t ignore.
Here’s everything parents need to know about Trump accounts for babies.
What Are Trump Accounts?
Trump Accounts are government-funded tax-deferred savings accounts created by the OBBBA for children born between January 1, 2025, and December 31, 2028. The government deposits $1,000 into an index fund in the child’s name. The money grows tax-deferred (no taxes on gains while it’s invested) and can be withdrawn starting at age 18.
Key features:
- $1,000 government contribution — no parent contribution required
- Invested in an index fund — tracks the broad U.S. stock market
- Tax-deferred growth — no annual taxes on investment gains
- Available at age 18 — for any purpose (education, home purchase, retirement savings, etc.)
- Extended to age 31 — if used for qualified education expenses
The accounts are administered by the Treasury Department. Parents don’t choose the investment — it’s automatically placed in a broad market index fund, similar to how the Thrift Savings Plan (TSP) works for federal employees.
How Do Trump Accounts Work?
Step 1: Your baby is born (2025-2028). The account is created automatically when a Social Security number is issued for the child. No separate application is needed.
Step 2: The $1,000 is deposited. The Treasury Department funds the account with $1,000, invested in a broad market index fund.
Step 3: The money grows. The investment grows tax-deferred. You can’t add your own money to a Trump Account (it’s not like a 529 where parents contribute). It’s solely the government’s $1,000 plus investment returns.
Step 4: Withdrawal at 18+. When the child turns 18, they can withdraw the money for any purpose. If they use it for qualified education expenses, the money remains tax-free. For other purposes, the gains may be taxed as ordinary income upon withdrawal.
What you can’t do:
- You can’t add personal contributions to the account
- You can’t change the investment from the default index fund
- You can’t withdraw the money before the child turns 18 (except in limited hardship situations)
- Parents don’t control the account — it belongs to the child
Who Is Eligible for a Trump Account?
Eligibility is simple:
- The child must be born between January 1, 2025, and December 31, 2028
- The child must be a U.S. citizen or resident
- The child must have a Social Security number
There are no income limits for parents. Whether you earn $20,000 or $2,000,000, your baby gets the same $1,000 account. This makes Trump accounts for babies one of the few universal financial benefits in the OBBBA.
Adopted children: Children adopted during the eligible period may also qualify. The account is tied to the child’s birth date and SSN issuance, so consult a tax professional for specific adoption timing questions.
Multiple births: Each qualifying child gets their own $1,000 account. Twins born in 2026 receive $2,000 total (two separate accounts).
Since Trump accounts for babies are still being set up by the Treasury, the best thing parents can do right now is ensure their newborn has a Social Security number. This universal eligibility is what makes Trump accounts for babies stand out from other OBBBA provisions that have income phase-outs.
How Much Will the $1,000 Grow?
The $1,000 is invested in a broad U.S. stock market index fund. Here’s what historical average returns suggest:
| Child’s Age | Estimated Value (7% avg return) | Estimated Value (10% avg return) |
|---|---|---|
| Age 5 | $1,400 | $1,611 |
| Age 10 | $1,967 | $2,594 |
| Age 18 | $3,380 | $5,560 |
| Age 25 | $5,427 | $10,835 |
| Age 31 (education extension) | $7,612 | $19,194 |
At a conservative 7% average annual return, the $1,000 grows to about $3,380 by age 18 — enough for a semester’s worth of textbooks, a trade school deposit, or a contribution toward a first apartment. At 10% average returns (the S&P 500’s historical average), it could reach $5,560.
If the child doesn’t touch it until age 31 (the education extension deadline), the growth is more significant — potentially $7,600 to $19,000 depending on market performance.
Important: These are estimates based on historical averages. The stock market fluctuates, and the actual value could be higher or lower. The account has no guaranteed return — it’s a market investment, not a savings account.
Trump Accounts vs. 529 Plans: What’s the Difference?
| Feature | Trump Account | 529 Plan |
|---|---|---|
| Who funds it | Government ($1,000) | Parents/family |
| Additional contributions | No | Yes (unlimited, state-dependent) |
| Investment choices | One index fund (no choice) | Multiple options |
| Tax treatment | Tax-deferred; tax-free for education | Tax-free growth; tax-free for education |
| Withdrawal age | 18+ (31 for education) | Any age for qualified education expenses |
| Income limits | None | None |
| Can be used for non-education | Yes (gains taxed) | Yes, but 10% penalty + taxes on gains |
| OBBBA expanded uses | N/A | K-12 tutoring, books, job training (new in 2026) |
Bottom line: Trump accounts and 529 plans serve different purposes. The Trump Account is a small, passive bonus. A 529 plan is where you actively build college savings. The smart move is to have both — let the Trump Account grow on its own while contributing regularly to a 529 for serious education savings.
For a deeper look at the expanded 529 rules, see our 529 plan rules 2026 guide.
How to Claim a Trump Account for Your Baby
As of early 2026, the Treasury Department is still setting up the infrastructure for Trump Accounts. Here’s what we know:
Automatic enrollment: Accounts are expected to be created automatically when a child’s Social Security number is issued. Parents shouldn’t need to apply separately.
Notification: The Treasury Department will notify parents when the account is established. This may come via mail to the address on file with the SSA.
Access and tracking: Details on how parents (and eventually the child) will access account information are still being finalized. It’s expected to be an online portal similar to existing government savings programs.
Action items for parents right now:
- Make sure your baby has a Social Security number (apply at the hospital or your local SSA office)
- Keep your address current with the Social Security Administration
- Watch for correspondence from the Treasury Department
- Don’t confuse this with a 529 — you should still start saving separately for your child’s future
For the latest updates on Trump Account implementation, check Treasury.gov or the IRS website.
What Can the Money Be Used For?
At age 18, the child can use the money for anything:
- College tuition and expenses
- Trade school or vocational training
- First car or apartment deposit
- Starting a business
- Roth IRA contribution (roll it into long-term retirement savings)
- Anything else — it’s their money
Tax implications:
- If used for qualified education expenses: withdrawals are tax-free (both the $1,000 and all gains)
- If used for non-education purposes: the original $1,000 is not taxed, but the investment gains are taxed as ordinary income
- The education tax-free treatment extends to age 31
Smart strategy for parents: Encourage your child to use the Trump Account for education expenses (tax-free) and fund non-education goals through other savings. Or, if they don’t need it for college, rolling the funds into a Roth IRA at 18 lets the money continue growing tax-free for decades — potentially becoming a meaningful retirement head start.
The flexibility of Trump accounts for babies is one of their biggest advantages — unlike 529 plans, there’s no penalty for non-education use (just taxes on gains).
Frequently Asked Questions
What is a Trump Account for babies?
A Trump Account (officially MAGA — Money Account for Growth and Advancement) is a government-funded $1,000 savings account invested in an index fund for every child born between 2025 and 2028. The money grows tax-deferred and becomes available when the child turns 18.
Do I need to apply for a Trump Account?
No. The accounts are expected to be created automatically when your baby receives a Social Security number. You don’t need to fill out forms or apply. The Treasury Department will notify you when the account is established.
Can I add my own money to a Trump Account?
No. Trump accounts for babies only hold the government’s $1,000 contribution. If you want to save additional money for your child’s future, open a 529 plan or a custodial investment account separately.
What happens if my child doesn’t use the money by age 18?
The money stays invested and continues growing. There’s no “use it or lose it” deadline at 18 — that’s simply when withdrawals become available. For education purposes, the tax-free treatment extends to age 31. For non-education use, the child can withdraw at any time after 18.
Are Trump Accounts available for babies born before 2025?
No. Only children born between January 1, 2025, and December 31, 2028, are eligible. Children born before or after this window do not receive a Trump Account. Congress could extend the program, but it’s currently limited to these four birth years.
Disclaimer: BrokeMeNot provides financial information for educational purposes only. Trump Account implementation details are still being finalized by the Treasury Department — rules may change. We are not financial advisors. Consult a qualified professional for investment decisions. Some links may be affiliate links. Read our full disclaimer.
Toyin Onagoruwa is the founding editor of BrokeMeNot. He works as a software engineer in banking and has over 5 years of experience writing about personal finance, credit cards, and frugal living. He combines his fintech engineering background with real-world money management experience to create financial content you can actually use. Connect with him on LinkedIn.