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A new federal account now lets parents invest for a child from birth. Trump Accounts opened for contributions on July 4, 2026, and the Treasury adds $1,000 for eligible babies.
Here is how it works, how it fits with a custodial Roth IRA and a teen brokerage account, and what to open first.
Key takeaways
- Eligible children born in 2025 through 2028 can get a $1,000 pilot deposit from the Treasury.
- Family, friends and employers can add up to $5,000 a year in total. Employers can give up to $2,500 of that.
- The money stays invested until the year the child turns 18, with very few exceptions.
- A custodial Roth IRA needs the child’s own earned income.
Kids’ investment accounts at a glance
| Account | Best for | Key numbers |
|---|---|---|
| Trump Account | Newborns and kids under 18 | $1,000 pilot · $5,000 yearly cap |
| Custodial Roth IRA (Schwab) | Teens with a paycheck | $0 minimum · capped by earnings |
| Fidelity Youth Account | Teens 13 to 17 learning to invest | $0 account fees · from $1 |
Rules and terms as of September 2026, from the IRS, the Treasury and each provider’s official page.
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Step 1. Check which accounts your child qualifies for
Trump Accounts were created by the 2025 tax law known as the One Big Beautiful Bill Act, under section 530A of the Internal Revenue Code. Per the IRS instructions for Form 4547, a child can have one if they are under 18 at the end of the election year and have a valid Social Security number. For an election in 2026, that means born after December 31, 2008.
For the $1,000 pilot deposit, the child must also be a US citizen born in 2025 through 2028 and expected to be your qualifying child.
Step 2. Open the Trump Account and request the $1,000
The election is made on Form 4547. You can file it with your tax return, submit it through your IRS online account, or start at trumpaccounts.gov. You need an ID.me login and the child’s Social Security number, date of birth and address. The Treasury then sends activation steps for the official Trump Accounts app.
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The Treasury says opening an account costs $0. If you are already filing your return, our guide to tax refund dates and new deductions for 2026 covers the rest of this season’s paperwork.
Step 3. Decide how much to add each year
Money from parents, relatives, friends and employers shares a $5,000 annual limit, indexed to inflation after 2027. Employers can give up to $2,500 of it. The Treasury’s $1,000 and qualified government or charity deposits don’t count.
Family contributions are not tax-deductible. A child’s account can’t cover a family emergency, so keep that cushion in a high-yield savings account.
Step 4. Understand how the money is invested
Until the growth period ends, the IRS allows only mutual funds or ETFs that track an index of mostly US companies. The Treasury said on July 1, 2026 that all contributions start in a default S&P 500 index ETF, and that more low-cost index choices would open later.
An index fund still rises and falls with the market. For how index ETFs work, see our list of ETFs for long-term growth.
Step 5. Add a custodial Roth IRA when your teen starts working
An adult opens a Roth IRA for a minor as custodian. The child needs taxable compensation, such as summer-job wages. For 2026, the IRS caps IRA contributions at $7,500 or the child’s taxable compensation, whichever is less. A Trump Account has its own separate limit.
The IRS says qualified Roth distributions are tax-free, which is why small early contributions can matter.
Step 6. Plan for age 18
The Trump Account’s growth period ends on December 31 of the year before the child turns 18. From January 1 of that year, most traditional IRA rules apply. Early withdrawals can face a 10% additional tax unless an exception applies, such as higher education or a first home purchase. With a custodial Roth IRA, control passes to your child at 18, or 25 in some states, per Schwab.
Common mistakes
- Waiting to file Form 4547 and forgetting the $1,000 election for a child born in 2025 through 2028.
- Putting a Roth IRA contribution in for a child with no earned income.
- Counting on Trump Account money for bills before 18. Withdrawals are mostly blocked until then.
- Signing up through a link sent by text or social media. Go straight to trumpaccounts.gov or IRS.gov.
Tools and offers that help
1. Trump Account (U.S. Treasury)
The only account here with government seed money.
- Cost to open: $0, per the Treasury.
- Money in: $1,000 pilot deposit if eligible; up to $5,000 a year from others.
- Access: locked until the year the child turns 18, with narrow exceptions.
- Free $1,000 for eligible babies and a no-cost account.
- Very limited investment choice and no access for years.
How to open: see Step 2 above.
2. Custodial Roth IRA (Charles Schwab)
For teens who earn their own money.
- Cost: $0 minimum deposit and $0 online listed equity trade commissions, as of September 2026.
- Who controls it: the custodian manages it until the child turns 18, or 25 in some states.
- Requirement: the child must have earned income.
- Wide choice of stocks, ETFs and funds.
- No income, no contribution.
How to open: apply online as custodian with your child’s Social Security number.
3. Fidelity Youth Account
A brokerage account a teen runs with a parent watching.
- Ages: 13 to 17.
- Cost: $0 subscription fees, $0 account fees and a $0 minimum to open, as of September 2026.
- What teens can buy: most US stocks, some ETFs and Fidelity funds, from $1. No options, margin or crypto.
- Requirement: a parent or guardian with a Fidelity account opens it.
- Real practice with low stakes.
- No tax break; it is a taxable account.
How to open: the parent starts the application from their own Fidelity login. For other platforms, see our list of investment apps and brokerages for beginners.
Checklist: investing for your child
- Confirm your child has a Social Security number.
- File Form 4547 and tick the $1,000 pilot box if eligible.
- Activate the account in the official Trump Accounts app.
- Set a yearly amount you can keep up, within $5,000.
- Open a custodial Roth IRA once your teen has a paycheck.
How we compared these accounts
- Checked: every rule and fee on September 23, 2026, on IRS, Treasury and provider pages.
- Order: not a ranking. Accounts appear from youngest eligible age to oldest; the Quick answer names the natural first step for most families.
- Criteria: eligibility, cost, limits, investment choice, taxes and access.
- Scope: US accounts only.
- Independence: no provider paid for placement.
FAQ
Who gets the $1,000 in a Trump Account?
US citizen children with a Social Security number, born from January 1, 2025 through December 31, 2028, when an authorized adult makes the election on Form 4547.
Can my child have a Trump Account if born before 2025?
Yes, if they are under 18 at the end of the election year. They just don’t get the $1,000 pilot deposit.
Can I withdraw money from a Trump Account early?
Generally no. Before the year the child turns 18, money moves only through rollovers, an ABLE rollover at 17, excess-contribution fixes or the child’s death.
Can a child have a Roth IRA with no job?
No. Roth IRA contributions are limited to the child’s taxable compensation. A Trump Account does not need earned income.
For the full picture, see our hub How to Start Investing 2026 (US), our guide on how to start investing with just $100 and Roth IRA limits for 2026 and how they compare with a 401(k).
Sources
- IRS — Instructions for Form 4547, Trump Account Election(s)
- IRS — Trump Accounts
- U.S. Treasury — Official launch of Trump Accounts
- U.S. Treasury — Investment lineup for Trump Accounts
- IRS — IRA contribution limits
- IRS — Roth IRAs
- Charles Schwab — Custodial IRA
- Fidelity — Youth Account
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