The Trump administration is launching the new “Trump accounts“which will aim to provide children with a good start in savings and investment that could turn into a substantial nest egg when they reach adulthood.

Trump accounts are tax-advantaged savings accounts that the administration created through the One Big Beautiful Bill, which provided funding to generate $1,000 from the government in Trump accounts for children born between January 1, 2025 and December 31, 2028.

An analysis by the White House Council of Economic Advisers (CEA) shows that, based on historical average returns in the US stock market, the Trump accounts could become a substantial new nest egg by the time a child turns 18, depending on how much is contributed over time. The funds could then be used to help pay for education expenses, a down payment on a home, or a jump start on retirement savings.

President Donald Trump promoted the Trump accounts at an event on Wednesday. (Valerie Plesch/Bloomberg via Getty Images)

The accounts will be invested in a broad range of US stock index funds, like the low-cost funds available in many retirement accountsand will be in the name of the child and their parents or guardians acting as custodian of the account until they turn 18.

HOW TO KNOW IF YOUR CHILD QUALIFIES FOR A TRUMP ACCOUNT: “A FINANCIAL BET ON THE FUTURE”

Parents can contribute up to $5,000 per year to the accounts, while the parent’s employer can contribute up to $2,500 per year without affecting the employee’s taxable income.

yes maximum contributions are made to a Trump account belonging to a child born in 2026, the CEA estimates that Trump’s account would reach $303,800 at age 18 and $1,091,900 at age 28 under an average return scenario.

In a low-yield scenario, maximum contributions to a Trump account would have a balance of $187,400 at age 18 and $772,200 at age 28. In the CEA’s high yield scenario, the balances would increase significantly to $730,400 at 18 years and $1,904,280 at 18 years.

JPMORGAN CHASE TO OFFER $1,000 DEPARTURE FOR TRUMP ACCOUNTS BELONGING TO EMPLOYEES’ CHILDREN

Treasury Secretary Scott Bessent announced the philanthropic challenge linked to Trump’s accounts last month. (Adam Gray/Bloomberg via Getty Images)

If no contributions are made to a Trump account belonging to a child born in 2026 beyond the initial $1,000 provided by the government, the account balance it would reach $5,800 by age 18, while continued compounding growth would bring the account to $18,100 by age 28, according to CEA’s average return scenario.

Without contributions, the low-yield scenario would leave Trump’s account balance at $2,577 at age 18 and $10,607 at age 28.

In the high yield scenario, Trump’s account without additional contributions would be $21,229 at age 18 and $40,179 at age 28 in the high yield scenario.

BESSENT PRESENTS THE DETAILS OF THE “TRUMP ACCOUNT” AND ANNOUNCES THE PHILANTHROPIC CHALLENGE

Dell Technologies CEO Michael Dell and his wife Susan announced a $6.25 billion donation from the Dell family to help build the Trump accounts. (Andrew Caballero-Reynolds/AFP/Getty Images)

Trump accounts are also available to children born before January 1, 2025, who are under the age of 18, although they will not receive the $1,000 deposit from the federal government. The CEA notes that because they are older and would have fewer years of accumulated earnings before turning 18 or 28, their account balances would be significantly lower on average.

The Trump administration has indicated that the Trump accounts will officially launch on July 5, 2026. Parents can enroll their child in the program by making an election when they file their taxes.

GET THE FOX BUSINESS ANYWHERE CLICK HERE

Several companies have offered to match parents’ contributions or otherwise provide seed money to Trump accounts belonging to employees’ children, while some philanthropists have also pledged to donate funds to help seed the accounts.