The Treasury Department will open “Trump Accounts” automatically for up to 60 million children, under rules published Wednesday, September 30, in the Federal Register, the government’s official daily record of new rules. The accounts open starting Thursday, October 1, so parents no longer have to sign up to get one. Treasury says the goal is to reach all eligible children, not only those whose parents knew to sign up.
Why It Beats A Passbook Savings Account
A passbook or other regular savings account earns bank interest, and that interest is taxed every year. A Trump Account works like a retirement account (an IRA) for a child. The money is invested in low-cost U.S. stock index funds, and it grows without being taxed each year. Taxes are paid later, when the money comes out. Fees are capped at 0.1% a year. The trade-off: the money is locked until the child turns 18, and the earnings are taxed as income when they are withdrawn.
Story Snapshot
- Accounts open automatically for children under 18 who have a Social Security number and no account yet.
- Children born from 2025 through 2028 are eligible for a $1,000 deposit from the government.
- Friends, relatives or employers can add up to $5,000 a year to each account.
- Treasury projects up to 60 million new accounts from the change.
What Changed: Automatic Enrollment Replaces Parent Sign-Ups
Treasury and the Internal Revenue Service (IRS) wrote the temporary rules. They create a Trump Account for every child under 18 who has a Social Security number and does not already have one. Before, a parent or guardian had to open the account by filing IRS Form 4547 through the Trump Accounts mobile app. Many families never did. Treasury says the new setup allows broad automatic enrollment while keeping families’ tax information protected.
The rules took effect Wednesday, September 30, and automatic enrollment begins Thursday, October 1. The accounts are built for long-term saving. Until a child turns 18, the money must go into U.S. stock index funds, which are low-cost funds that follow a broad slice of the market, charging no more than 0.1% a year. Children cannot use the money until they turn 18.
How Many Children Are Affected and Who Gets the $1,000
Between 7 and 8 million children had been signed up before the change. Treasury Secretary Scott Bessent said earlier that the total would reach about 70 million once automatic enrollment began. Treasury projects up to 60 million new accounts from the switch, plus about 2 million more for each new year of births.
The $1,000 seed deposit from the government goes to U.S. children with a Social Security number who were born from 2025 through 2028. Children born outside that window still get an account, but not the $1,000. Automatic enrollment alone does not qualify a child for the $1,000, Fox Business reported; a parent must make a separate election for it. A parent or guardian claims the account by verifying identity and legal authority through a Treasury app or webpage.
What About Children Born Before 2025?
Every child under 18 with a Social Security number gets an account. Only children born from 2025 through 2028 get the government’s $1,000. Older children start with an empty account that family can add to. Some will get help from a private pledge: Michael and Susan Dell have promised $6.25 billion to put $250 into the accounts of children born from 2016 through 2024 who live in qualifying ZIP codes.
Why This Matters: Family Money, Built In Early
Friends, relatives or employers can put up to $5,000 a year into each child’s account. Up to $2,500 of that can come from an employer tax-free. That means a grandparent who wants to help a grandchild now has an account waiting to receive the money. The family must claim the account first before others can add to it.
Treasury says the change is meant to reach every child, not only children whose parents knew to opt in. Under the old sign-up system, only 7 to 8 million children were enrolled. Opening the account for every eligible child removes that first step. Families still need clear notices and simple online tools to claim accounts and add money.
What Parents Should Watch Next
Parents should look for official notices on when an account opens and how to claim it. For a child born from 2025 through 2028, a parent must make a separate election to receive the $1,000 deposit. Claiming the account through the Treasury app or webpage is also the step that lets grandparents, other relatives and employers start adding money. Children who already have an account keep it; the automatic step covers only those who do not.
Sources:
feedpress.me, finance.yahoo.com, thehill.com, cnbc.com, investmentnews.com, briefs.co, punchbowl.news, newsmax.com, urban.org, cbsnews.com