President Donald Trump has unveiled new government-backed 'Trump Accounts' that will give eligible children a free $1,000 investment, which he says could grow into 'hundreds of thousands of dollars' and make some 'very rich'.
Launching the programme on Monday by ringing the opening bells of the New York Stock Exchange and Nasdaq from the Oval Office, Trump confirmed that qualifying families can now apply through the official process to open accounts.
The launch leaves parents with immediate questions about eligibility, applications and how the accounts work.
How To Claim The Free $1,000 Government Starter Gift
Parents of eligible children born between 1 January 2025 and 31 December 2028 can claim the government's one-off $1,000 starter contribution by opening a Trump Account through the official application process.
Qualifying children must be US citizens or US nationals with a valid Social Security number, while a parent or legal guardian must complete the required Trump Account election.
Parents or legal guardians can submit IRS Form 4547 or apply through the official online process by providing the required identifying information. Once the application has been approved and all eligibility requirements have been met, the government deposits the starter contribution into the account.
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What Exactly Are Trump Accounts?
Trump Accounts are government-backed, tax-advantaged investment accounts established under the Trump administration to help eligible American children begin investing from an early age. Contributions are invested in qualifying diversified US equity index funds, giving children long-term exposure to the stock market.
Once opened, the account's funds are invested in a qualifying index fund and have the potential to grow over time through compounding. As with any stock market investment, however, the account's value may rise or fall depending on market performance, meaning future returns are not guaranteed.
In addition to the government's starter contribution, parents, relatives and other eligible contributors may make further tax-advantaged contributions, subject to the programme's annual limits.
Whether an account reaches that level will depend on investment performance, how long the money remains invested and whether additional contributions are made over time.
When Can Children Tap Into The Money?
Trump Accounts are intended to support long-term saving, meaning withdrawals are generally restricted until the child reaches the ages and conditions set out under the programme.
The programme sets out when and how funds may be withdrawn, with the timing of access and any tax consequences depending on the child's age, the purpose of the withdrawal and the scheme's rules.
Once withdrawals become available, the funds may be used for permitted purposes, including higher education, purchasing a first home or starting a business.
Why Trump Claims Children Could Become 'Very Rich'
Trump's prediction that some children could become 'very rich' is based on the principle of compound investing, where returns generate additional returns over extended periods. Rather than reflecting the government's initial contribution alone, the projection assumes decades of investment growth and, potentially, additional contributions over time.
Trump said Monday that some accounts could eventually be worth 'hundreds of thousands of dollars', describing the potential growth as figures 'nobody ever thought even possible'. He also suggested the programme could help give future generations a stronger financial footing from an early age.
Whether those projections are realised will depend on a range of factors, including how financial markets perform over the coming decades and whether families choose to make additional contributions beyond the government's initial deposit. Because the accounts are invested in financial markets, future returns will depend on investment performance and cannot be guaranteed.
