Trump Accounts, a new federal savings and investment vehicle for children under 18, went live on July 4. To date, more than 6 million Trump Accounts have been opened for children under age 18, according to the Treasury Department. Of those, 1.4 million will receive the $1,000 federal pilot contribution for newborns.

Key Facts About Trump Accounts

They are IRA-style investment accounts for eligible children. The account belongs to the child, but the parent, legal guardian or other authorized adult who opened it will serve as custodian until the child is 18. Contributions from individuals must be made with after-tax money. Withdrawals, which generally may not be made until the year the child turns 18, will be taxed as ordinary income at the child’s tax rate – minus the portion attributable to after-tax contributions made over the years.

Only children who are US citizens and have a valid Social Security number may have a Trump Account. And no child may have more than one. To qualify for the one-time federal pilot contribution, the child must be born between January 1, 2025 and December 31, 2028.

Contribution limits: Family, friends and employer contributions combined may not exceed $5,000 a year for a single account. That limit will be adjusted for cost of living starting in 2027. Contributions from governments and nonprofits will not count toward the limit.

By law, contributions to Trump Accounts must be invested in low-cost, broadly diversified US stock index funds or exchange-traded funds. Their expense ratio must be 0.10% or less – so for every $1,000 in an account the annual fee can’t exceed $1 a year.

Original reporting: El Paso News (HLL/CB) — read the source article.