Trump rings NYSE bell, promotes 6M Trump Accounts for children

Trump used the NYSE opening bell ceremony to promote the launch of more than 6 million Trump Accounts, a new investment vehicle for children under 18 that went live July 4.

Donald Trump rang the New York Stock Exchange opening bell Monday and promoted the launch of more than 6 million Trump Accounts, IRA-style investment vehicles for children that provide a $1,000 federal seed contribution for newborns.

"It's a beautiful thing — a child has had no money, and when that baby becomes a man or a woman, they can have hundreds of thousands of dollars," Trump told CNBC ahead of the ceremony. The former president also said the stock market "is going to go through the roof."

The accounts, created by the One Big Beautiful Bill Act signed into law last year, offer tax-deferred growth through investments in low-cost US stock index funds. Of the 6 million accounts opened to date, 1.4 million qualify for the $1,000 federal pilot contribution for children born between January 2025 and December 2028, according to the Treasury Department. Roughly 86% of accounts belong to families earning less than $200,000 per year.

The program is estimated to cost $17 billion through 2028, according to the nonpartisan Committee for a Responsible Federal Budget, and represents one of the most ambitious efforts to expand stock ownership among American children. The accounts automatically invest in the State Street SPDR Portfolio S&P 500 ETF with a 0.02% expense ratio, with four additional fund options from BlackRock and Vanguard coming in the months ahead.

How Trump Accounts Work

Parents, legal guardians or other authorized adults may open accounts for any US citizen under 18 with a valid Social Security number. Contributions from family and friends are made with after-tax dollars and, combined with employer contributions, cannot exceed $5,000 per year per account. That limit will be adjusted for inflation starting in 2027.

Employers may contribute up to $2,500 per employee per year on a pre-tax basis, tax-free to the employee. At least 84 outside entities — including employers, foundations and states — have committed to contribute, according to a list compiled by Americans for Tax Reform. The Michael & Susan Dell Foundation pledged $6.25 billion for additional deposits into accounts of low-income children who do not qualify for the federal $1,000 contribution. Hedge fund manager Ray Dalio's foundation committed funds for about 300,000 children in lower-income areas of Connecticut.

The accounts are housed at Robinhood, with an app developed by Robinhood and Bank of New York Mellon for tracking investments. Treasury selected both firms to manage Trump Accounts in their initial phase.

Withdrawal Rules and Tax Treatment

Trump Accounts essentially become traditional IRAs when a child turns 18. Withdrawals before age 59 1/2 are subject to income tax and a 10% early withdrawal penalty, with exceptions for higher education costs, first-time home purchases up to $10,000, birth or adoption costs up to $5,000 per child, emergency expenses up to $1,000 per year, and certain medical expenses.

Contributions from individuals are made with after-tax dollars, so only the investment gains are taxable upon withdrawal. Contributions from governments, nonprofits and employers are made with pre-tax money, meaning the entire contribution plus gains is subject to tax when withdrawn.

The program has drawn criticism from policy analysts who question whether lower-income families will benefit. About a third of families lack $2,000 in emergency savings, making it difficult for them to contribute meaningfully, said Madeline Brown, a senior policy associate at the Urban Institute. Questions also remain about whether Trump Account balances could affect eligibility for federal benefits such as Pell Grants or Supplemental Security Income payments, said Elaine Maag, a senior fellow at the Urban Institute.

More than 50 companies, including Uber and Intel, have announced plans to contribute to employees' children's accounts. Trump told CNBC he expects Elon Musk's SpaceX to donate stock, though Musk has not publicly confirmed this.

This article is for informational purposes only and does not constitute investment advice.