A lesser-known provision of the One Big Beautiful Bill passed earlier this month is the so-called $1,000 Trump Accounts for newborns.
Axios reported that the provision was first floated by venture capitalist Brad Gerstner 18 months ago.
“The bill creates a new class of investment account in the tax code. Every American born between 2025 and 2028 automatically receives an account with $1,000 from the U.S. Treasury, which will be invested in a low-cost index fund,” Axios said.
The money is the property of the child, held in custodial trust until he or she is 18, when it changes into a traditional retirement account.
“My dream scenario is people use a decent percentage of it to get a head start in life, and the remainder for long-term planning,” said Matt Lira, a Republican operative who Gerstner hired to spearhead the lobbying effort in Congress.
Forbes noted that at 18, the beneficiary can pull up to 50 percent of the account’s value.
The person then has access to the full amount at age 25 for “qualified purposes, including small business loans and higher education, before gaining full control of the entire balance at 30 for any use,” Forbes said.
President Donald Trump explained how the accounts work at a White House meeting with business leaders in early June before the Big Beautiful Bill passed.
“For every U.S. Citizen born after December 31, 2024, before January 1, 2029, the federal government will make a one-time contribution of $1,000 into a tax-deferred account that will track the overall stock market,” he said.
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The program is set up to run just four years for congressional budgeting purposes, but obviously could be extended by later legislation if the accounts prove popular.
“[The accounts] will be open for additional private contributions each year from family, friends, parents, employers, churches, private foundations, and more,” Trump pointed out.
Axios reported that each child’s account can take up to $5,000 in additional contributions each year, including up to $2,500 on a tax-free basis by a parent’s employer.
Additionally, all Americans under 18 but born before 2025 are eligible to have an account set up for their benefit, but just will not receive the $1,000 in seed money from the federal government.
“Extensive research shows that children with savings accounts are more likely to graduate high school and college, buy a home, start a business, and are less likely to be incarcerated,” Trump said.
WATCH: @POTUS explains how the ‘Trump Accounts’ in the One Big Beautiful Bill work: “For every U.S. Citizen born after December 31, 2024, before January 1, 2029, the federal government will make a one-time contribution of $1,000 into a tax-deferred account that will track the… pic.twitter.com/Xh7BEb0DkI
— Rapid Response 47 (@RapidResponse47) June 9, 2025
The president stated that the accounts are being funded through the $1.7 trillion in mandatory savings in the Big Beautiful Bill in relation to Medicaid and other reforms.
The Washington Post projected the cost of the Trump Accounts could be more than $3 billion each year, given that roughly 3.6 million children are born in the U.S. annually.
The Milken Institute, a nonpartisan think tank, estimated in a March report that the initial $1,000 in seed money invested in a broad-based equity index fund, with no additional contributions, would likely grow, on average, to $8,000 after 20 years, $69,000 after 40 years, and $574,000 after 60 years.
Michael Dell, CEO of Dell Technologies, suggested that the accounts may also open up a new form of philanthropy in the U.S, telling Axios “that he could envision wealthy individuals choosing to make major gifts to entire ZIP codes or other geographies, via a mechanism that the Treasury Department has been charged with developing.”
Dell announced during the June roundtable with Trump that his company will match the $1,000 federal contribution to the accounts for the babies born to its employees.
The billionaire said that he and his wife, Susan Dell, through their foundation, also plan to make a “very significant gift” to benefit other children beyond just those affiliated with Dell Technologies.
“The ability of families, friends, benefactors, and employers to match the government’s generosity amplifies the life-changing potential of this initiative,” Dell said.
Dell CEO @MichaelDell delivers remarks at an Invest America Roundtable at the White House: “We see the Invest America Act, and the establishment of these Trump Accounts as a simple, yet powerful way to transform lives.” pic.twitter.com/AL7w29Tatu
— Rapid Response 47 (@RapidResponse47) June 9, 2025
The White House said that the Trump Accounts “will afford a generation of children the chance to experience the miracle of compounded growth and set them on a course for prosperity from the very beginning.”
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