Meridian Blog

If you’ve been hearing about “Trump accounts” lately and wondering what they actually are, you’re not alone. Officially called Section 530A accounts, these new investment accounts are set to roll out July 4, 2026, and they’re designed to help kids build wealth from an early age.

At a high level, think of a Trump account as a starter investment account for your child, backed in part by the government. The idea is simple: give kids a financial headstart by investing money early and letting it grow over time.

A Trump account is an investment account opened in your child’s name but managed by you (or another adult) until they turn 18. The money inside the account is invested, typically in low-cost broad stock market index funds, so it has the opportunity to grow over time.

One of the major differences from a Roth IRA is that your child doesn’t need earned income to make contributions. That means you can open an account for a newborn, which is a big deal when it comes to long-term investing.

The Big Headline: The $1,000 Government Contribution

One of the most talked-about features is the $1,000 government “seed” deposit.

If your child qualifies (kids born between 2025 and 2028), the government will contribute $1,000 to get the account started. That money can then grow over time just like any other investment.

Here’s why that matters:

If that $1,000 grows at historical S&P 500 averages (10.5% in the cited example below from the Trump Account website), it could turn into over $6,000 by the time your child reaches 18 years of age —without you adding anything more.

Source: https://trumpaccounts.gov/

How Much Can You Contribute?

• You can contribute up to $5,000 per year per child
• That total includes contributions from:
  • Parents
  • Grandparents
    Friends
  • Employers (counts towards the $5,000 limit)

And importantly, the $1,000 government contribution does NOT count toward the $5,000 limit.

Let me show you a calculation again:

Taking a look at the example below from Fidelity, $5,000 contributed each year for 18 years with a 7% rate of return would be close to $170,000. That’s a significant boost to a child’s portfolio!

Source: https://www.fidelity.com/learning-center/personal-finance/trump-accounts

How the Money Is Invested

One thing the program does intentionally is keep investing simple.

Instead of letting people pick individual stocks, Trump accounts are limited to:

• Broad market index funds
• Low-cost investment options

This is actually a good thing for most families. It encourages a long-term, “set it and forget it” strategy rather than trying to time the market.

Trump accounts are meant for long-term goals, not quick access. In fact, withdrawals are not allowed during the “growth period” before age 18 and after that, the rules/penalties generally mimic traditional IRAs.

Once your child turns 18, they gain control of the account. From there, the money can be used for things like:

• College or education expenses
• A down payment on a home
• General wealth building

It’s designed to give them flexibility as they enter adulthood.

Where Trump Accounts Really Shine

There are a few situations where these accounts make a lot of sense.

First, if you have a newborn or young child, starting early is huge. Even small monthly contributions—like $50 or $100—can grow significantly over 18 years.

Second, if you qualify for the $1,000 government contribution, it’s hard to ignore. Even families who don’t plan to contribute much may still open an account just to capture that benefit.

Third, they’re great for hands-off investors. If you don’t want to actively manage investments, this structure keeps things simple.

But What About FAFSA? (This Is Important)

Here’s where things get a little more nuanced—and where many families need to pay attention.

Although guidance has not been set on this issue yet, because Trump accounts are owned by the child, they will likely be treated similarly to custodial accounts (like UGMA/UTMA accounts) when it comes to FAFSA (financial aid calculations).

And that matters because:

• Student-owned assets are counted more heavily
• FAFSA can assess up to 20% of student assets
• Compare that to parent assets, which are typically assessed at around 5–6%

An example:

Let’s say your child has $25,000 in a Trump account when applying for financial aid.

• Up to $5,000 could be counted toward their expected family contribution
• That could reduce the amount of need-based aid they qualify for

This doesn’t mean you should avoid Trump accounts—it just means you should plan around them, being mindful of how much is in the account when your child reaches college age, and consider pairing them with a 529, which is treated more favorably for FAFSA.

Final Thoughts: Is It Worth It?

At the end of the day, the value comes down to one simple idea: time in the market. The earlier you start, the more opportunity your money has to grow.

For many families, the smartest approach will be to use Trump accounts alongside other tools, not instead of them. When used thoughtfully, they can be a powerful way to give your child a real financial head start.

Because the accounts will be created and held by an agent designated by the Treasury Department, Meridian Financial Partners is not able to manage the investments for you. However, as always, we are happy to talk and provide ongoing guidance when it comes to how these accounts will fit in with your overall financial plan.

For more information or to sign up for a Trump account, please visit: http://trumpaccounts.gov/

After missing the 2025 birthdate deadline, he’s taking on extra chores around the house to help his piggy bank catch up with the other babies.