New Trump accounts could help parents invest in their child’s future early

New “Trump accounts” are giving parents a new way to invest in their children’s financial future — starting at birth.

The accounts, part of the president’s “One Big Beautiful Bill Act,” provide a $1,000 government contribution for babies born between Jan. 1, 2025, and Dec. 31, 2028. Families can contribute up to $5,000 a year, with an expected 10% annual growth rate.

Financial experts say the earlier parents begin investing — whether through these accounts or other options like 529 college savings plans — the more time that money has to grow before a child turns 18.

We’re not talking about stashing money under a mattress. The goal is to set money aside where it can grow — helping cover future expenses such as college, a car or even a down payment on a home.

A head start at home

Jim White is already thinking long-term for his 8-year-old grandson, Jaxson.

“So every month we put a little bit of money for him and his brother. So when they’re older, they’ll have either money for college, or you know, a car, house, who knows what, how much stuff will be in the future,” White said.

White regularly sets aside money to help strengthen Jaxson’s financial future — just as he encourages him to stay active in sports like soccer and baseball.

Chase Peckham with the San Diego Financial Literacy Center said that kind of forward-thinking makes a difference.

“That’s impressive, that a grandfather is that forward-thinking,” Peckham said.

How Trump accounts work

Under the Trump accounts program — also referred to as 530A accounts — eligible newborns receive a $1,000 government-funded “nest egg.”

“The government gives them $1,000 nest egg to start with — why wouldn’t you do that?” Peckham said.

Parents can sign up when filing their taxes using Tax Form 4547 or through an online portal scheduled to launch July 5. While some details of the program are still being finalized, Peckham said families should not let that stop them from enrolling.

“Then you’re going to have an opportunity to make the decision down the road of whether you want to contribute it to it or not,” Peckham said.

Other savings options for parents

Trump accounts are not the only way to invest in a child’s future.

Parents can also consider a 529 college savings account or a custodial brokerage account. In both cases, adults manage the funds until the child becomes an adult.

Peckham recommends starting with a small, comfortable contribution to stay consistent.

“And as you’re going, you’re making a little … you get a raise. You make a little bit more money. You come into money. You can make that decision to increase that investment as you go forward,” Peckham said.

Teaching kids to build wealth

Once a child lands a job, parents can help them open a Roth IRA or a high-yield savings account to begin managing their own money.

“You’re not only saving them a nest egg, you’re teaching them how to do this on their own or at least have the idea that there are different ways to save money,” Peckham said.

Jackson said it is too early to know what he wants to do after high school — maybe become a student counselor or a firefighter.

“So I can save people from a fire,” Jaxson said with a smile.

Whatever path he chooses, White hopes Jackson will have a strong financial foundation — built in part by starting early.

Financial experts acknowledge that the options can feel complicated. But they say the most important step is simply to begin — even if it is just opening a basic savings account — and build from there.

This story was originally reported for broadcast by NBC San Diego. AI tools helped convert the story to a digital article, and an NBC San Diego journalist edited the article for publication.