The recently enacted One Big Beautiful Bill Act (H.R. 1, P.L. 119 21) introduced a new savings vehicle designed specifically to help families invest for children’s long term financial future. These Section 530A accounts, or “Trump” accounts, as they are being called, exist for minors and offer tax advantaged growth during childhood. However, they come with many new rules and specific limitations. Below is a high level overview to better understand what they are and how they work, so you can begin to consider if this may be something right for your family. Seven Springs Wealth Group does not provide tax or legal advice, and you should consult with your own tax and legal advisors for your specific situation.
Trump Accounts are government sponsored, tax advantaged investment accounts for children under 18. They are similar in framework to an IRA and are governed by strict rules during the child’s first 18 years of life (called the “growth period”). After the child turns 18, the account is governed by rules similar to a traditional IRA, although some unique differences exist. These accounts were created to encourage long term saving and investing for children, beginning as early as birth and lasting until adulthood. And while setting it up can begin now, no contributions - federal or private - can be deposited until July 4, 2026.
During each year of the growth period up to $5,000 per child per year can be contributed. These contributions can come from parents, guardians, grandparents, extended family, friends, employers, and certain qualifying organizations (with certain limits depending on the source). This wide array of eligibility means coordination is important to avoid exceeding annual limits.
One of the primary features is the initial contribution the federal government will make. Eligible children born between January 1, 2025, and December 31, 2028 can receive a one time $1,000 federal contribution. To receive this, parents or guardians must make an election using IRS Form 4547 to open the account and request the federal deposit. This can be made with a tax return filing, or via an online portal (more on this below).
The American Institute of Certified Public Accountants has recommended that the IRS automatically enroll eligible children, with the goal of increasing fairness and reducing administrative burdens.
Michael and Susan Dell have committed $6.25 billion to support this effort. This commitment goes toward providing an additional $250 deposit into Trump Accounts for the first 25 million American children who enroll and do not qualify for the federal government’s $1,000 newborn contribution. In order to qualify for the Dell’s contribution, children must be age 10 or younger (born before January 1st, 2025) and live in a ZIP code where the median family income is below $150,000.
Based on what we know as of now, one can elect to open a Trump account for those eligible by submitting IRS Form 4547 (expected to be includable with 2025 tax filing), or by using an online portal. Form 4547 serves as the form to establish the account, and is also where one can request the one-time, $1,000 government contribution. One can submit the form using the online portal at trumpaccounts.gov.
While the initial rollout is managed by the Treasury, the Treasury has selected specific partner institutions and custodians to hold the accounts. As of late 2025, this included, but was not limited to, Fidelity, Schwab, Vanguard, JPMorgan Chase, and Bank of America.
While a child is under 18, investments must follow strict guidelines. Funds must be placed in certain mutual funds or ETFs that track a broad U.S. equity index and are required to have very low fees. Additionally, the funds can’t be industry or sector specific and can’t use leverage. These limitations are designed to support long term, low cost, broad market investing.
No penalty-free withdrawals are allowed until the calendar year in which the child turns 18. At the point when the child turns 18, the account shifts to looking more like a traditional IRA with basis, but specific details of this are still being understood. However, once 18, it is our current understanding that the funds can be accessed without penalty for qualified expenses like education, a first home purchase, or starting a business. Other withdrawals may be subject to restrictions, penalties, and taxed at ordinary income rates.
These accounts represent a new tool, with opportunities to integrate them into a family’s broader education, retirement, and generational wealth strategies. However, there is still much not yet known as these accounts also bring new rules, new coordination challenges, and evolving IRS guidance. Thus, these accounts may not be the right fit for everyone, and factors like existing retirement and education strategy, tax situation, and overall financial goals should all be considered in order for families to understand the opportunities and limitations before proceeding.
If you would like to discuss this more or need help evaluating whether a Trump Account aligns with your goals, we welcome the opportunity to talk further.
Sources include IRS.gov, journalofaccountancy.com, vanguard.com, whitehouse.gov, and trumpaccounts.gov.
The information in this material is not intended as tax or legal advice. Seven Springs Wealth Group does not provide tax or legal advice. Consult with your tax professional before making any changes to your accounts. All investing involves risk, including the possible loss of principal. Nothing contained herein should be construed as individualized advice and is for informational purposes only. Different types of investments involve varying degrees of risk, and there can be no assurance that any specific investment will be suitable or profitable for a client's investment portfolio. Past performance is no guarantee of future performance. Seven Springs Wealth Group is an investment adviser registered with the US Securities and Exchange Commission (SEC). Registration does not imply any level of skill or training. For a complete discussion of Seven Spring Wealth Group’s services and fees, you should carefully review the firm’s disclosure brochure available at www.adviserinfo.sec.gov