Trump Accounts launch with $1,000 for newborns as experts question reach

Approximately 6 million families reportedly registered before July 4 launch

Trump Accounts became available nationwide on July 4, allowing any adult to open an account for a child under 18 with a valid Social Security number. Parents download an app to create the account. By law, money in the accounts must be invested in a low-cost index fund designed for long-term growth. Contributions from family, friends, and employers are capped at $5,000 per child per year.

According to the BBC’s reporting, approximately 6 million families had signed up before the accounts went live, and families have contributed nearly $125 million to accounts as of the end of the launch week. The White House said earlier this week that the $1,000 subsidy for babies born during President Trump’s second term had been deposited into more than half a million accounts. Approximately 3.6 million children were born in the United States in 2025, according to provisional data.

Withdrawals before age 59½ are subject to taxes and a possible 10% penalty unless the money is used for higher education, a first home, or personal emergency expenses. A congressional report classified Trump Accounts as a new form of traditional IRA with distinct rules.

The White House argued the program addresses what it called historically “unevenly distributed” stock ownership, adding that “many households — especially younger and lower‑income families — have little or no exposure.”

Critics questioned whether the structure would benefit the families that need it most. Will McBride of the Tax Foundation said the application process is too complicated and will lead to a “minority that benefits.” Adam Michel, director of tax policy studies at the Cato Institute, called the idea “admirable” but warned it may “not live up to the rhetoric.” He noted the main benefit is the $1,000 starting subsidy and said many families would be better off using existing savings accounts such as 529 plans or IRAs. Michel also pointed to early-withdrawal penalties as a barrier, saying lower-income children may feel compelled to take money out at 18 to “help make ends meet.”

The program attracted corporate backing. BlackRock said about 40% of Americans have no exposure to financial markets. Visa and Dell have also pledged support. Andy Blocker of Edward Jones said, “If by year-end more families have a clear on-ramp to begin saving and investing for their children’s financial futures, that’s success.”

Projections published by Trump Accounts estimate that a $1,000 starting pot could grow to $6,000 by age 18 without additional contributions, based on historical S&P 500 averages. If $250 a year is added, the pot could reach $19,000; the maximum $5,000 annual contribution could yield $271,000. The program warns that actual results may differ and are not guaranteed.

The launch event included the ringing of the New York Stock Exchange opening bell from the Oval Office.