When Congress passed the One Big Beautiful Bill Act on July 4, 2025, it quietly launched what many experts see as the nation’s first large-scale federal child investment account initiative, better known to the public as Trump Accounts. These accounts, sometimes described as child savings accounts or youth investment accounts, aim to give children a financial foundation long before they reach adulthood.
The program officially opens in July 2026, but interest surged after the Michael & Susan Dell Foundation announced a $6.25 billion donation for older children who otherwise would have missed the federal benefit. With details still emerging and misinformation circulating, clarity matters more than ever.
Here’s what families need to know—simply, accurately, and without political noise.
At a Glance
Status: Signed July 4, 2025; accounts open July 4, 2026
Federal Benefit: $1,000 deposit for children born Jan 1, 2025–Dec 31, 2028
Dell Donation: $250 deposit for children under age 10 (born before 2025) in eligible ZIP codes
Enrollment: IRS Form 4547 will be available in 2026
Two Ways Children Receive Funding
Depending on your child’s age, they may qualify for the federal deposit, the Dell deposit, or—in certain ZIP codes—both. All contributions flow into the same federally regulated child investment account.
1. Newborns (2025–2028): The $1,000 Federal Deposit
Children born between January 1, 2025, and December 31, 2028 automatically qualify for a $1,000 federal seed deposit, assuming they have a Social Security number. The goal is to begin wealth-building at birth, when time is on the child’s side.
2. Older Children (Born Before 2025): The $250 Dell “Catch-Up”
Older kids were initially left out. The Dell Foundation’s pledge fills that gap by offering a $250 deposit for children:
- 10 and under,
- born before 2025, and
- living in ZIP codes with median incomes below $150,000.
In most cases, newborns receive the federal deposit and older kids receive the Dell deposit. In some ZIP codes, newborns may receive both, but the Dell initiative primarily ensures older children aren’t left behind.
Why These Accounts Matter: The Power of Early Compounding
The true strength of these accounts lies not in the size of the initial deposits, but in the decades of growth that follow. Even modest amounts can grow surprisingly quickly when left invested in a diversified portfolio.
Using a long-term historical return of 7% annually (inflation-adjusted):
If Your Child Is a Newborn Starting With $1,000
Age 18: roughly $3,400
Age 25: roughly $5,400
If Your Child Is 5 and Receives the $250 Dell Deposit
Age 18: roughly $600
These balances alone are meaningful—but they are just the beginning of what these accounts can become.
How Federal Child Investment Accounts Work
Investment Strategy: Funds are invested in low-cost, diversified index funds. Parents do not choose investments.
Access: Funds generally unlock at age 18, unless used for approved purposes.
Approved Uses:
- Higher education
- First-time home purchase
- Starting a business
Contribution Rules:
- Families may contribute up to $5,000 per year
- Employers may contribute up to $2,500 of that annual limit
- Government seed deposits do not count toward the limit
A Program Designed to Grow Over Time:
Recent IRS and Treasury guidance makes it clear these accounts were designed to evolve into a multi-source wealth-building system, not just a single federal deposit. Beyond the federal and Dell contributions, future funding may come from:
- Private donors and foundations
- Nonprofit organizations
- Employer benefit programs
- State or local matching programs
The federal seed is only the beginning. These accounts were built to grow with your child—and with support from multiple corners of the community.
How Contributions Amplify Growth
The $1,000 federal seed or $250 Dell deposit is only the starting point. Beginning July 4, 2026, these accounts can accept multiple types of contributions, including:
- Family contributions (up to $5,000 per year)
- Employer contributions (up to $2,500, counted toward the $5,000 limit)
- Nonprofit or philanthropic contributions
- Private donors and foundations
- State or local government matching programs (if adopted in the future)
This design is intentional: these accounts are meant to become long-term, multi-source financial tools, not one-time deposits.
And this is where compounding becomes transformative.
For example, if a 5-year-old begins with the $250 Dell deposit, and parents add just $25 per month, the balance grows to roughly $6,900 by age 18. But that is a conservative scenario.
When families—or employers, nonprofits, and eventually even states—add more substantial amounts, the long-term potential increases dramatically:
- $1,000 + $2,500/year could grow to over $163,000* by age 25
- $1,000 + $5,000/year could exceed $321,000* by age 25
This is the power of compounding when consistent contributions layer on top of the initial seed.
*For illustration purposes only. Actual market returns vary and are not guaranteed. Past performance is not indicative of future returns. All investments involve risk, including the possible loss of principal.
Illustrative Growth Table (7% Annual Compounding)
For illustration purposes only. Actual market returns vary and are not guaranteed. Past performance is not indicative of future returns. All investments involve risk, including the possible loss of principal.
| Initial Deposit | Annual Contribution | Years | Future Value @ 7% (Illustrative)* |
| $1,000 | $0 | 18 | $3,379.93 |
| $1,000 | $0 | 25 | $5,427.43 |
| $1,000 | $2,500 | 18 | $88,377.51 |
| $1,000 | $2,500 | 25 | $163,550.03 |
| $1,000 | $5,000 | 18 | $173,375.09 |
| $1,000 | $5,000 | 25 | $321,672.62 |
| $250 | $0 | 18 | $844.98 |
| $250 | $0 | 25 | $1,356.86 |
| $250 | $2,500 | 18 | $85,842.56 |
| $250 | $2,500 | 25 | $159,479.45 |
| $250 | $5,000 | 18 | $170,840.15 |
| $250 | $5,000 | 25 | $317,602.05 |
What Parents Should Do Right Now
Start putting money aside to make your contributions once accounts are available. One option is a low-minimum Finhabits account that lets you automate small monthly investments.
Conclusion
Whether your child qualifies for the $1,000 federal deposit, the $250 Dell catch-up, or future private contributions, these federal child investment accounts represent a new way for families to build long-term financial stability. And while the public will continue calling them Trump Accounts, their purpose is far broader: helping children enter adulthood with real assets and real opportunity.
We’ll keep tracking this topic closely and keep you informed as new updates are released.
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FAQ
Do parents need to apply?
Yes. IRS Form 4547 will be required once available in 2026.
Can newborns receive both the federal and Dell deposits?
In some ZIP codes, yes. Most older kids receive only the Dell deposit.
Can families add their own money?
Yes. Families may contribute up to $5,000 annually once the accounts launch.
What if my child was born before 2025?
They may qualify for the $250 Dell deposit if they are age 10 or under and live in a qualifying ZIP code.
How can Finhabits help?
Finhabits gives families an easy way to start building the habit of long-term investing before these federal child investment accounts become available. With a low-minimum account and automated monthly contributions, parents can practice consistent investing now—so when the new accounts open in 2026, they’re ready to take full advantage of the compounding power these programs offer.
Disclaimer:
This material is provided for informational purposes only and is not intended to offer investment, legal, or tax advice. All images and figures are for illustrative purposes. Investment advisory services are offered through Finhabits Advisors LLC, a registered investment advisor with the SEC. Registration does not imply a certain level of skill or training. Past performance is not indicative of future returns. All investments involve risk, including the possible loss of principal. Securities are offered through Apex Clearing Corporation, Member of FINRA, SIPC. Securities held at Apex are protected up to $500,000, which includes a $250,000 cash limit. See SIPC.org for more details.
Projections are for educational and illustrative purposes only. They are based on the assumptions stated and will change if those assumptions change. They do not predict or reflect the actual performance of any Finhabits portfolio, and they do not account for economic, market, or individual financial factors that can impact real investment outcomes.
© Finhabits, Inc. All rights reserved.
Sources
White House Press Release – “Landmark Dell Gift Supercharges Trump Accounts for America’s Kids”
AP News – “Trump Accounts for kids: What they are, how Michael Dell boosted them”
Congress.gov – The One Big Beautiful Bill Act (Public Law 119-4)
CBS News – “How Trump accounts for kids will work and more key details following Dell donation”
U.S. Treasury / IRS – “Guidance on Trump Accounts under the Working Families Tax Cuts; upcoming regulations”
Internal Revenue Service (IRS). Treasury, IRS issue guidance on Trump Accounts established under the Working Families Tax Cuts; notice announces upcoming regulations.
