Dave Carnevale, CFA, CFP®
September 10, 2026
My daughter Chiara was born in the spring of 2025, which makes her eligible for a new government savings account that officially launched on July 4, 2026 called the 530A or Trump Account. I recently went through the process of opening one for her and wanted to share what I learned. There was a lot of speculation about what these accounts would offer, and while they aren’t quite as good as I’d hoped, they can still be useful for the right family. Here’s everything I learned.
What is it, exactly?
Created under the One Big Beautiful Bill Act (OBBBA) of 2025, a 530A is essentially a traditional IRA for kids, opened and managed by an “authorized individual.” That’s a legal guardian first, then a parent, then an adult sibling, then a grandparent, in that pecking order. The big twist compared to a regular IRA is your child doesn’t need earned income to have one. A newborn can have a retirement account before they can hold their own head up.
Here’s the details:
- Each child can receive up to $5,000 in total annual contributions until they turn 18.
- Employers can kick in up to $2,500 per employee per year, but that counts toward the same $5,000 cap, not on top of it.
- Contributions to a 530A account don’t count against the limits for a Traditional or Roth IRA. So, if your enterprising 15-year-old has a part-time job, they could contribute $7,500 into their own Roth or Traditional IRA and still get the full $5,000 contributed into their Trump account.
- The day they turn 18, the account automatically converts into a plain old traditional IRA, subject to all the usual IRA contribution limits going forward.
Right now, Robinhood is the only custodian offering these accounts, though that’s expected to change as bigger names like Schwab and Fidelity presumably jump in. Investment options are limited to mutual funds or ETFs tracking the S&P 500, and at the moment there’s exactly one choice: SPYM. More funds have been approved but haven’t shown up on the platform yet. The good news is that fees and expenses are capped at 0.10%.
During the “growth period,” meaning while the child is under 18, no withdrawals or distributions are allowed, and the money is completely locked up. Once the child turns 18 the account automatically becomes a traditional IRA and plays by traditional IRA rules which means income taxes on withdrawals, a 10% penalty for taking money out early, and required minimum distributions starting at age 73.
Who’s actually eligible?
Any child with a Social Security number, including non-citizens, who is 17 or younger for the entire year can have a 530A opened for them. But the free seed money from the U.S Treasury is a different story:
- Only U.S. citizen children born between January 1, 2025 and December 31, 2028 qualify for the one-time $1,000 seed deposit from the U.S. Treasury.
- The Michael & Susan Dell Foundation is chipping in $250 for the first 25 million accounts opened for children who live in areas with a median household income of $150,000 or less and who were born before January 1, 2025. You can see if your child qualifies by clicking here.
So, depending on the child’s birthday and zip code, you could be looking at free money or just the account itself with nothing in it to start.
How does this compare to a 529?
I’ve had several people ask me if they should open a 530A or a 529, and my answer is usually both. They’re not competing for the same job. A 529 is a tax-advantaged account built for education, and withdrawals are completely tax-free when used for qualified school expenses. A 530A account is built for retirement and long-term wealth accumulation, just like any other IRA. One is for tuition; the other is for compounding over decades.
Should you open one?
If you have a child, grandchild, or sibling born on or after January 1, 2025, I think it’s a pretty easy decision. Open the account and collect the free one-time $1,000 seed contribution, and let compounding do what compounding does best over the next several decades.
Even if the child was born before that cutoff and misses out on the free seed money, opening an account can still make sense. I think of it as one more tool in the toolbox, one that can play a role in estate planning and passing wealth down a generation. If you’re not sure whether it fits into your broader financial plan, that’s exactly the kind of thing we can help you with.
How to actually open one
The process was surprisingly easy. Here’s how it works:
- Visit http://www.trumpaccounts.gov and click “download the app,” which will display a QR code for you to scan with your phone.
- The app walks you through your own basic information, then the child’s.
- You’ll need to fill out Form 4547 (Trump Account Election). If you didn’t tell your tax preparer you wanted to open a Trump account when filing your 2025 taxes, you can fill it out in the app instead, and it’s a straightforward process.
- If you don’t have an ID.me login, you’ll be asked to photograph the front and back of a government-issued ID (passport or driver’s license) and snap a selfie for identity verification. It’s important to note that your biometric data will be stored in a database and used across government sites for verifying your identity with the IRS, Social Security Administration, and wherever else the government wants your facial recognition information.
- If your child was born after January 1, 2025, there’s a section where you elect to receive the $1,000 seed contribution. Don’t skip it.
Once I went through these steps, the account was verified and open within two days. I’m still waiting for the seed money to arrive, which can take up to four weeks.
If the idea of navigating a government website and a new app makes you want to close this page and forget the whole thing, you don’t have to do it alone. Reach out and we’re happy to walk you through it!