President Donald Trump announced the creation of government-sponsored investment accounts for children under age 18 as part of the sweeping budget bill he signed into law on July 4, 2025.
The so-called “Trump accounts” are set to become available on July 4, 2026, and parents of U.S. citizens born from 2025 through 2028 will be able to opt-in for an initial deposit of $1,000 from the federal government.
Michael Dell, billionaire CEO of tech company Dell, and his wife, Susan, on Dec. 2 pledged a donation of $6.25 billion to provide an initial deposit of $250 to children ages 10 and under in certain ZIP codes when their families open an account on their behalf.
Though Trump accounts are not explicitly designed for college savings, they will have similar benefits to 529 college savings plans. For example, Trump account beneficiaries may be able to use funds in the account for higher education expenses without early withdrawal penalties.
However, when the beneficiaries turn 18, the accounts will be transferred into individual retirement accounts subject to IRA rules and tax advantages.
Named for a section of the tax code, 529 plans were created in 1996 to help families save for their children’s higher education expenses. The plans are state-sponsored investment accounts that can offer tax advantages like state income tax-deductible contributions and tax-free withdrawals for qualified expenses.
“Fundamentally, any way that people can save money is good, whether it’s the 529 accounts or the Trump accounts or Roth IRAs or [Health Savings Accounts],” Michael Green, a certified financial planner with Apollon Wealth, tells CNBC Make It. “They’re all good tools. It really comes down to what people are trying to accomplish and what their goal is, what their capacity to save is.”
While several details about Trump accounts are not yet available, the Internal Revenue Service has issued some guidance on how the accounts will function. Here are some of the key differences between Trump accounts and 529 savings plans.
