'Trump accounts': US govt launches new federal investment programme for newborns

US President Donald Trump on Wednesday launched a new federal investment programme for newborns, with the White House saying over 500,000 families have already enrolled. The initiative aims to help children build long-term savings and address affordability concerns for American families.

The investment accounts, named after Trump are being set up for babies born over a three-year period and include an initial government contribution. The move comes as the Trump administration and the Republican Party seek to address rising affordability concerns ahead of the November midterm elections, according to Reuters.





The accounts were created last year under Trump’s One Big Beautiful Bill Act, the administration’s flagship tax and spending legislation.

Under the scheme, the US Treasury will deposit $1,000 into investment accounts for all children born between 2025 and 2028. Officials estimate that around 25 million families will be eligible for the benefit.

The government is also encouraging families to make additional contributions to the accounts. Some private investors have already stepped in, including entrepreneur Michael Dell and his wife Susan, who have committed a combined $6.25 billion to the programme.

Speaking at a White House event in Washington to launch the accounts, Press Secretary Karoline Leavitt said that the initiative was designed to address gaps in savings among American families.

She said if families contribute the maximum $5,000 each year, the account will accumulate almost $1.1 million by the time the newborn turns 28.

The Trump administration is also promoting the programme as a bipartisan effort rather than a partisan policy.

“It’s not about red or blue politics,” Cheryl Hines, an actress and the wife of Health Secretary Robert Kennedy, said at the event.

Despite the rollout, public awareness of the programme remains limited. A poll by Exclusive Public First found that 57 per cent of Americans had never heard of a Trump account, while another 25 per cent said they were aware of it but could not explain how it worked, Politico reported. Only 14 per cent of respondents said they had heard of the accounts and could explain them.

What are 'Trump accounts'?

Trump accounts are federally supported investment accounts designed to help US children build savings from birth through long-term investing.

Under the scheme, each eligible child receives a one-time government deposit of $1,000 into an account opened in their name, with parents or guardians acting as custodians until the child turns 18, according to ET.

Money in the accounts is required to be invested in low-cost index funds largely tracking US companies. The funds remain locked in until adulthood, after which the account converts into an individual retirement account (IRA).

Families, employers and other contributors can add up to $5,000 annually, while employer contributions of up to $2,500 are exempt from being treated as taxable income. Withdrawals are governed by standard IRA rules, with limited allowances for specific purposes such as education, buying a first home or starting a business.

The administration said that the initiative brings together government support, private participation and household savings to strengthen long-term financial security for future generations.