“No part of the account funds will be invested in any asset other than an eligible investment.” That sentence is in the law that created Trump Accounts, and an eligible investment, it says, is a low-cost fund that tracks a broad index of US shares. Since 30 September, Treasury rules have also let charities put individual company stocks into the same accounts. That change, and the automatic enrollment of tens of millions of children that came with it, is what President Donald Trump celebrated in the Oval Office on Wednesday.
Seventy million accounts, most of them still empty
Under temporary regulations published on 30 September, the IRS began opening an account from 1 October for every eligible child under 18 who has a Social Security number and doesn’t already have one. That added about 60 million children to roughly 10 million whose parents had signed up since the accounts launched on 4 July, ABC News reported, for a total of about 70 million. The law allows this: section 530A lets the Treasury Secretary make the election to open an account for an eligible child.
An account existing doesn’t mean it holds money. What goes in, and from whom:
- $1,000 from the government, once, but only for children born between 1 January 2025 and 31 December 2028.
- Up to $5,000 a year from family and friends, a limit set in the law that rises with inflation after 2027. Employer contributions of up to $2,500 count within it, Fox Business reported.
- Gifts from governments and charities, which don’t count towards the $5,000. The largest is from Michael and Susan Dell: $250 each for 25 million children, $6.25 billion in all. By Thursday, $2.6 billion had reached more than 10 million children, Yahoo Finance reported.
Parents still have to claim an automatically opened account before they can manage it or before family contributions can be made, according to Fox Business.
What the law says, and what the new rule allows
| Section 530A (the law) | Treasury’s temporary rule (30 September 2026) | |
|---|---|---|
| What the account may hold | Only “eligible investments” | Eligible investments, plus stock received as a qualified stock contribution |
| Eligible investment | Mutual fund or ETF tracking the S&P 500 or another broad US equity index; no sector funds | Unchanged |
| Fees | No more than 0.1% a year | Unchanged for funds |
| Leverage | Not allowed | Unchanged |
| Who can give individual stock | Not addressed | Governments, tribes and 501(c)(3) charities, to a class of at least 5,000 children |
| What stock | Not addressed | Publicly traded stock of US companies |
| How long it is held | Not addressed | Generally the earlier of five years or the end of the period before age 18 |
Sources: 26 U.S.C. 530A; Treasury temporary regulations T.D. 10056, as summarised by Thomson Reuters Checkpoint and other coverage.
How Treasury reconciles the two
Treasury’s reasoning, as reported, is that the law’s restriction governs what an account buys with its own money. A share given directly by a qualifying donor isn’t bought with account funds, so it can be accepted without breaking the eligible-investment rule. Whether that reading survives a challenge is a separate question; for now it is the rule in force.
The first big test is SpaceX, which listed on Nasdaq in June. Its president, Gwynne Shotwell, and her husband pledged one share each to more than two million children in July, a gift reported at roughly $320 million to $325 million.
Michael Dell defended the change this week. “It’s kind of hard for me to believe that’s a bad thing, right? That these children are going to somehow be negatively influenced because they now have one share of SpaceX,” he said, according to Yahoo Finance. The concerns raised in coverage are the ones the original index-fund rule was meant to avoid: children’s savings tied to single companies rather than the market, the possibility of very large donors influencing prices, and the tax deductions donors receive.
What $1,000 becomes by 18
“They’ll end up being quite rich by the time they’re 18,” the president said on Wednesday. The arithmetic depends almost entirely on what families add.
| What goes in | Value at 18 |
|---|---|
| $1,000 government seed only | $3,380 |
| $1,000 seed + $250 Dell gift | $4,225 |
| Seed + Dell gift + $1,000 a year from family | $38,224 |
| Seed + Dell gift + $5,000 a year (the annual limit) | $174,220 |
Illustration, not a forecast. Assumes a constant 7% annual return after fees, starting deposits at birth and yearly contributions at the end of each year for 18 years. Index funds can fall as well as rise; real returns will differ. The $5,000 limit rises with inflation after 2027, which is ignored here. Our calculation.
The seed and the Dell gift alone come to about $4,200 at 18 on these assumptions: useful, but not riches. The difference between that and a six-figure balance is whether a family can put in money every year, which is also where the gap between children will open up.
What parents need to do now
Money in the account can’t be withdrawn before the year the child turns 18. After that, the law treats the account much like an individual retirement account, so withdrawals and taxes follow IRA-style rules.
Frequently asked
- Was my child automatically enrolled in a Trump Account?
- If your child is under 18, has a Social Security number and did not already have an account, the IRS opened one from 1 October 2026 under temporary regulations. A parent or guardian still has to claim it before managing it or adding money.
- Who gets the $1,000 Trump Account deposit?
- Only children born between 1 January 2025 and 31 December 2028. Older children can have accounts but do not get the government seed.
- Can Trump Accounts hold individual stocks?
- The law says account funds may only be invested in low-cost funds tracking a broad US stock index. A Treasury rule from 30 September 2026 lets governments and charities donate publicly traded US company shares directly, reasoning that the restriction covers purchases made with account funds.
