Trump Accounts, a new savings and investment vehicle for children, officially became operational on Saturday, July 4. President Donald Trump rang the opening bell for Nasdaq and the New York Stock Exchange from the Oval Office on Monday to mark the first day of trading.

How Trump Accounts Work

Trump Accounts join the list of other existing tax-advantaged accounts intended to benefit kids’ futures, such as custodial Roth IRAs and 529 plans. Each of these accounts has its own rules, limitations, and benefits. While Trump Accounts do not lessen the complexity for families deciding which accounts best suit their needs and means, they have raised awareness of the value of investing in US children from birth, provide an avenue for third parties to contribute to a child’s future, and provide federal seed money for newborns.

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. Eligible investments must be mutual funds or exchange-traded funds that track either the S&P 500 stock index or any index that tracks the returns on equity investments primarily made in US companies. Annual fees may not top 0.1% of a child’s assets in the fund.

Parents and their kids may keep track of the investments in the account by using an app created by Robinhood, the commission-free trading and investing platform, and the Bank of New York, both of which were selected by Treasury to manage Trump Accounts in their initial phase. Parents, legal guardians, or other authorized adults who want to open an account for an eligible child – and if appropriate, apply for the $1,000 federal pilot contribution – may do so by filling out Form 4547 and submitting it to the IRS.

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