Trump Accounts Launch July 4, Giving $1,000 to Every Newborn
WASHINGTON (AP) — On Saturday, the Trump administration will launch “Trump Accounts,” a new government-sponsored investment savings program that provides $1,000 in seed money for every newborn U.S. citizen, timed to coincide with the 250th anniversary of the Declaration of Independence. The program, created under the Working Families Tax Cuts Act — the “One Big Beautiful Bill” signed into law exactly one year ago — allows parents to open tax-advantaged investment accounts for their children, with funds invested in broad U.S. stock market index funds.
According to AP News, the accounts are designed to give every American child a financial start in life. Parents can open accounts for any child born during President Donald Trump’s second term — between January 1, 2025, and December 31, 2028 — and automatically receive the $1,000 government deposit. Accounts can also be opened for older children, but they will not receive the seed money.
How Trump Accounts Work
Under the program, the U.S. Treasury deposits $1,000 into each eligible child’s account. Private banks and brokerages manage the funds, which must be invested in U.S. equity index funds that track the stock market and charge no more than 0.10% in annual fees. The money cannot be accessed until the child turns 18, and withdrawals are restricted to specific purposes such as education, first home purchases, or starting a business.
Parents can contribute up to $2,500 annually in pretax income, much like contributions to a retirement account. Employers, relatives, friends, and philanthropic organizations can also contribute, with total annual contributions capped at $5,000 per child. Contributions from governments and charities do not count toward that limit, according to the IRS official Trump Accounts page.
To qualify for the $1,000 seed money, a baby must be a U.S. citizen, have a valid Social Security number, and be born between January 1, 2025, and December 31, 2028. Any parent can open an account for a qualifying child, regardless of the parent’s immigration status. Families can sign up at trumpaccounts.gov using IRS Form 4547.
A Boost from Billionaires
The program has already received significant support from major philanthropists and corporations. Michael and Susan Dell pledged $6.25 billion to provide $250 in seed money for 25 million children age 10 and under living in lower-income ZIP codes — those with median family incomes of $150,000 or less. These children are too old to qualify for the government’s $1,000 deposit.
On Wednesday, Trump announced on Truth Social that Sanjay Mehrotra, CEO of Micron Technology, would donate $250 million to the program. Hedge fund founder Ray Dalio and his wife, Barbara, pledged $75 million for children under age 10 in Connecticut, amounting to $250 for 300,000 children in qualifying ZIP codes. Investor Brad Gerstner previously pledged $250 per child under age 5 in Indiana.
Major companies including Uber, Intel, IBM, Nvidia, and Steak ‘n Shake are adding Trump Account contributions to their employee benefits packages, part of what Treasury Secretary Scott Bessent calls the “50 State Challenge” to encourage corporate participation.
The Vision: Capitalism from Birth
President Trump framed the program as a fundamental shift in how government supports families. “We’re doing something much better than giving the next generation a handout,” Trump said. “We’re giving them ownership of America’s future.”
Investor Brad Gerstner, speaking at a White House event in January, articulated the philosophy behind the accounts: “The answer to more socialism is more capitalism. This makes every child in America a capitalist from birth.”
Supporters argue the program introduces more Americans to the stock market and gives children born into poverty a chance to benefit from market growth. The Council of Economic Advisers estimates that a fully funded account — with maximum annual contributions — could grow to approximately $303,800 by age 18 and over $1 million by age 28.
Critics Warn of Widening Wealth Gap
However, the program has drawn sharp criticism from economists and policy experts who argue its design will exacerbate rather than reduce inequality. The central concern: Trump Accounts rely on voluntary contributions, meaning wealthier families who can afford to contribute the maximum will benefit disproportionately.
According to a Forbes analysis by economics professor Teresa Ghilarducci, the nonpartisan Congressional Research Service estimates that a child whose family adds nothing to the account finishes with approximately $5,000 at age 18, while a child whose parents and wealthy connections max out contributions finishes above $300,000. That is a sixtyfold spread fixed at birth.
“Same program, same rules, a sixtyfold spread fixed at birth,” Ghilarducci wrote. “An account that rewards the families with the most to give builds the most for the children who need it least.”
Dr. Darrick Hamilton, the economist who originated the “baby bonds” concept over 15 years ago as a progressive policy to reduce the racial wealth gap, told States Newsroom that the Trump administration “co-opted a good idea” in both rhetoric and design. He described the program’s structure as “regressive,” akin to 529 college savings plans that primarily benefit those who already have resources.
“They’re subsidizing the transmission of intergenerational wealth for those that already have wealth in the first place,” Hamilton said.
Broader Economic Context
The launch of Trump Accounts comes amid significant affordability concerns in the United States. The Federal Reserve’s preferred inflation gauge rose to a new three-year high in May 2026, gas prices have peaked during the ongoing war with Iran, and food prices have risen since Trump’s inauguration. Many Americans are bracing for cuts to social safety net programs — including Medicaid and the Supplemental Nutrition Assistance Program (SNAP) — that were enacted under the same legislation that created Trump Accounts.
Critics point out that the $1,000 seed money cannot be accessed until age 18, doing nothing to help children in their early, most vulnerable years. Additionally, disbursements from the accounts are subject to taxes, and the growing balance could render some individuals ineligible for means-tested social safety net programs — a “benefit cliff” issue that Hamilton said may not have been intentionally designed but remains a serious concern.
Baby Bonds vs. Trump Accounts
The concept of government-provided savings accounts for children was originally developed by Hamilton and economist William Darity Jr. as a targeted policy to close the racial wealth gap. Their progressive “baby bonds” proposal — introduced in Congress by Sen. Cory Booker (D-NJ) and Rep. Ayanna Pressley (D-MA) — would provide up to $2,000 annually based on family income, with the largest deposits going to the lowest-income families.
Before Trump Accounts, California, Connecticut, and the District of Columbia were piloting baby bonds programs targeted to youths in poverty, foster care, or those who lost a parent to COVID-19. Those programs are managed by the state, not private investment firms, and wealthier children do not benefit from them.
What’s Next
As Trump Accounts officially launch on July 4, several key questions remain unanswered. How many families will actually open accounts, particularly among lower-income households with limited access to financial literacy resources? How will the ongoing war with Iran and persistent inflation affect the program’s reception? And will the 2026 midterm elections impact the program’s future or potential modifications?
Hamilton summed up the stakes bluntly: “You can’t isolate these so-called Trump accounts from the larger reconciliation bill. What they’re investing is trivial compared to the ways in which they’re structuring inequality writ large with the tax code for the wealthy. This is a rhetorical distraction that’s aimed at trying to appear populist.”