Trump's ‘Baby Investment Accounts': What you need to know

Economic Times

20 hours ago

AP
Under the plan, each eligible newborn would receive a one-time $1,000 contribution from the U.S. government, deposited into a mutual or index fund.
A new proposal backed by US President Donald Trump would create $1,000 investment accounts for every American baby born between Jan. 1, 2025, and Dec. 31, 2028. Known unofficially as "Trump Accounts" or 'MAGA Accounts,' the program is part of a broader tax-cut package that recently passed the House and is now pending in the Senate.Each eligible newborn would receive a one-time $1,000 contribution from the federal government, invested in a stock market-linked mutual or index fund. Additional contributions of up to $5,000 annually could be made by parents, religious institutions, or private donors. Funds would become partially accessible at age 18 for education, job training, or buying a first home, with full access at age 30.
Dell Technologies has already pledged to match the government's $1,000 contribution for newborns of its employees, should the proposal become law. Other business leaders — including CEOs from Uber, Goldman Sachs, and Robinhood — attended a recent 'Invest America' roundtable at the White House to discuss the plan.Later, the White House issued a press release claiming support from the industry leaders including Goldman Sachs CEO David Solomon, Uber CEO Dara Khosrowshahi, and Altimeter Capital CEO Brad Gerstner."Together with historic tax cuts, an increased child tax credit, higher wages, and monumental economic growth, the One Big Beautiful Bill will change the lives of middle-class families across America," the release added.
However, despite high-profile support, the proposal faces opposition in the Senate, particularly from fiscal conservatives who are pushing for revisions. Critics argue the program lacks the tax advantages of existing savings options like 529 plans and may not offer the strongest long-term returns.
What is the Trump baby investment account program?
It's a proposed federal initiative that would provide every U.S.-born child between Jan. 1, 2025, and Dec. 31, 2028, with a $1,000 government-funded investment account, tied to the performance of the U.S. stock market.
What are these accounts officially called?
The accounts are part of the "Invest America" plan and have been informally referred to as 'Trump Accounts' or 'MAGA Accounts' (Money Accounts for Growth and Advancement).
How much money does each child receive?
Each eligible newborn would receive a one-time $1,000 contribution from the U.S. government, deposited into a mutual or index fund.
Can families or others contribute more?
Yes. Parents, religious institutions, and private organizations can contribute up to $5,000 per year into the account during the child's upbringing.
When can the child access the money?
Funds become partially accessible at age 18 for specific uses like education, vocational training, or a first home purchase. The full balance becomes available at age 30.
Are there tax advantages?
The accounts are tax-deferred, meaning investments grow tax-free until withdrawal — similar to 529 college savings plans, but with a lower annual contribution limit.
Who controls the account before the child turns 18?
The child's legal guardians would manage the account until the child becomes eligible to access the funds.
Is this program already law?
No. While the provision passed the House as part of a broader tax package, it's still under review in the Senate and faces opposition from some fiscally conservative lawmakers.
Which companies support this plan?
Dell Technologies has pledged to match the $1,000 for newborns of its employees if the plan passes. Executives from Goldman Sachs, Uber, Robinhood, and others have shown interest by attending White House discussions.
How is this different from a 529 plan?
529 plans typically allow higher contributions and are geared specifically toward education. Trump accounts are broader in usage and provide an initial government-funded seed investment.