The Republican tax bill had all sorts of quirky provisions, but arguably one of the most surprising was a new kind of investment account — the Trump Account, or 530A accounts, a new tax-advantaged Roth IRA-like investment account for newborns.

The pilot program will grant $1K to children born between 2025 and 2028, plus philanthropic contributions will offer $250 to families with children 10 or under who were born before Jan. 1, assuming they live in a zip code below a certain earnings threshold.

In other words, it’s a limited-time Trump offer. And no doubt, it’s one that families should jump on sooner rather than later to kick-start their child’s long-term savings; whether to add more is a bigger question.

When do Trump accounts drop? Families have already signed up ~6M children for Trump Accounts per data from the Treasury, getting in line for the unique government handout. The $1K seed deposit or $250 philanthropic contribution will begin being delivered on or around Jul. 4, coinciding with the 250th anniversary of the country. You can get a jumpstart on claiming that money and setting up an account to manage it.

• To earn the $1K seed deposit, families must file IRS Form 4547 on IRS.gov — they can do so now, even before the money starts being disbursed on Jul. 4.
• Then they can download the new Trump Accounts app, create an account, and wait for their invite to access it.

Is It Worth Adding More?

The new 530A accounts will allow up to $5,000 in individual contributions at first; half of that can come from an eligible employer and won’t be included in the employee’s gross income. However, there are some restrictions — but contributing to this account likely makes more sense than alternatives.

• For example, the proceeds must be invested in “mutual funds or exchange-traded funds (ETFs)” that primarily track US investments, with management fees capped at 0.10%.
• The 530A offers a superior option for saving long-term, at least compared to UGMA/UTMA accounts and 529s, with one major drawback — you have to pay taxes if you withdraw.

In it for the long haul: If you want to deposit money into a piggybank for your child to smash at 18, the 530A account is not for you. But if you can look past the modest investment restrictions and look at 530A accounts as a long-term wealth builder, it could be the superior pick — an easy way to jumpstart retirement savings and then convert it to a Roth IRA when your child is eligible to access the funds.