Donald Trump promises $1,000 investment account for every baby born in America between 2025 and 2028; here's what we know
President Donald Trump is advocating for a pilot initiative that aims to provide every American baby born during his current term with a $1,000 investment account. The proposal is part of Trump's sweeping tax and spending legislation, dubbed the "Big Beautiful Bill". The accounts, referred to as 'Trump Accounts', are tax-deferred and would be established for children born between January 1, 2025, and December 31, 2028. The initiative was unveiled at a roundtable discussion on Monday.
What are Trump accounts and who will get them?
The Trump Accounts are designed as tax-exempt investment accounts for newborn U.S. citizens, with an initial $1,000 contribution from the federal government. These accounts would be available to all families, regardless of income. Parents will be allowed to contribute up to $5,000 tax-free each year. The funds would be linked to mutual or index funds that track the stock market.
The money can be accessed by the child upon turning 18, but only for specific purposes such as education, starting a business, or buying a home. Withdrawals for other uses would be taxed at a higher rate. Full access to the funds would be allowed at age 30.
Trump stated, "These accounts will be private property controlled by the child's guardians." The earlier version of the proposal had referred to the initiative as "MAGA Accounts", referencing his campaign slogan.
Cost, support, and criticism of the proposal
An estimated 3.6 million babies are born annually in the U.S., and if all are covered, the cost of the program could surpass $3 billion each year. However, Republicans have not yet released detailed cost estimates. Despite being a relatively small line item in the broader $7 trillion federal budget, the program is being promoted as a symbolic and practical step to give children a better financial start.
Trump has promoted this as a family-centered policy at a time when his administration faces criticism for proposed cuts to Medicaid and food assistance programs. The White House said, 'The One Big Beautiful Bill will change the lives of middle-class families across America.'
The House has already passed the bill by a narrow margin. The Senate, however, remains divided, with both moderates and conservatives expressing concerns about the bill's cost and priorities.
Addressing wealth inequality and gaining corporate backing
While similar programs in states like California and Washington D.C. have focused on reducing income disparity by targeting lower-income families, Trump's version of the baby investment account does not distinguish by income. The program is open to all eligible newborns.
Supporters argue that the move counters Democratic claims that Trump's tax plan primarily benefits the wealthy. A statement from the White House claimed the initiative would help drive economic growth, support middle-class families, and provide opportunities to children.
Business leaders such as Michael Dell also backed the idea. Dell said, 'With these accounts, children will be much more likely to graduate from college, to start a business, to buy a home, and achieve lifelong financial stability.'
Companies like Salesforce, Uber, Goldman Sachs, and Dell Technologies are reportedly participating in promoting the initiative. Trump concluded, 'They'll really be getting a big jump on life, especially if we get a little bit lucky with some of the numbers and the economy.'
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