The White House announced a major new initiative this week aimed at expanding economic opportunity for children across the United States. In partnership with Michael Dell, founder and CEO of Dell Technologies, and his wife Susan, the administration revealed one of the largest philanthropic pledges ever directed toward American youth.

The Dell family has committed $6.25 billion to support a national early-wealth–building effort. Their donation will be incorporated into a new system of child savings accounts designed for individuals under the age of 18. Eligible families may qualify for a $250 contribution from the Dell commitment or a one-time $1,000 federally funded deposit, depending on their circumstances.

Below is a comprehensive guide to how the initiative works and what families should expect.

Understanding the “Trump Accounts”

The new savings vehicles—informally called Trump accounts—were introduced following President Donald Trump’s legislative package passed in July. These accounts resemble individual retirement accounts, offering tax-deferred growth, but with added flexibility. Contributions may come from a variety of sources including relatives, employers, and qualifying organizations.

The intent behind the accounts is to give children an early stake in long-term wealth accumulation, mirroring the structure of retirement savings but targeted toward the next generation.

How to Open a Trump Account

Although the accounts will not officially launch until mid-2026, families may begin the preliminary steps now. A parent, legal guardian, adult sibling, or grandparent may open an account on behalf of any U.S. citizen under 18.

To initiate the process, families must file IRS Form 4547, either separately or with their 2025 tax return. An online application option is expected to become available in 2026. After the form is submitted, the Treasury Department will conduct an authentication procedure before the account is activated. Initially, accounts will be held by a financial agent designated by the Treasury, with the option to transfer the balance to a private brokerage at a later time.

How the Free Contributions Work

Once a Trump account is active, eligible children may receive either the $1,000 government-funded deposit or the $250 contribution from the Dell family pledge.

Babies born from 2025 through 2028 can claim the one-time $1,000 “pilot program contribution” simply by filing Form 4547. This benefit has no income restrictions and will be available to all participants, though no funds will be credited before July 4, 2026.

Children who are ten years old or younger, born before January 1, 2025, and living in ZIP codes with a median income of $150,000 or below may instead receive the $250 Dell-funded contribution. This grant targets lower- and moderate-income communities and requires no additional application. Older children may also receive funding if resources remain available after initial distribution. Census data shows that only a small fraction of ZIP codes—roughly 3%—exceed the $150,000 median income threshold.

Contribution Rules for Families and Employers

Starting July 4, 2026, individuals such as parents and grandparents may contribute up to $5,000 per year in after-tax dollars, up until the year before the child turns 18. The cap will adjust for inflation beginning in 2027.

Employers may also add up to $2,500 annually per worker, counted toward the same $5,000 limit, but such contributions will not be treated as taxable income. State and local governments, as well as qualifying nonprofit organizations, may make additional contributions that do not count toward the annual limit.

Investment Options Within Trump Accounts

Investment choices for these accounts will be limited to broad U.S. equity index funds, including mutual funds or exchange-traded funds that track approved market indices. These funds must follow a qualified index, avoid the use of leverage, and maintain annual fees below 0.1 percent. Analysts estimate that roughly 186 existing investment products may meet these requirements.

How Much Can an Account Potentially Grow?

Financial experts note that the $250 or $1,000 seed contributions alone are unlikely to grow significantly without additional family deposits. For example, a $1,000 deposit invested at birth could grow to approximately $4,700 by age 18 at a 9% annual return, excluding inflation.

However, small consistent contributions can make a substantial difference. According to chartered financial analyst Jason Norris from Ferguson Wellman Capital Management, adding $50 each month could result in a balance of more than $29,000 by the time the child turns 18. Norris emphasizes that this level of savings can meaningfully expand financial security for young adults.

The overarching goal, according to experts at the Aspen Institute, is to broaden participation in the financial markets. Roughly half of Americans do not own stocks, and wealth accumulation is heavily concentrated among the top 10% of households, who hold the vast majority of equities and mutual fund shares. Early exposure to investing is seen as a pathway toward narrowing this divide.

Withdrawal Rules and Restrictions

Withdrawals from Trump accounts are generally prohibited before age 18. Limited exceptions include rollovers, refunds of excess contributions, or distribution upon death.

When the child turns 17, certain transfers to ABLE accounts for individuals with disabilities may also be allowed. After age 18, the accounts function similarly to traditional IRAs. Withdrawals made before age 59½ may incur income tax and a 10% penalty, though exceptions exist for qualified expenses like education or first-time home purchases.

Comparing Trump Accounts to Other Savings Options

Trump accounts join a growing list of tax-advantaged savings vehicles available in the U.S., including 529 college savings plans and Roth IRAs. Each provides different benefits and limitations. Some financial professionals point out that Trump accounts may not offer the strongest tax incentives, and higher-income families—who tend to contribute the maximum amounts—may gain the most benefit.

Still, policymakers and advocates argue that the program’s symbolic and practical value lies in giving every child a foundation for future financial growth, especially in communities that have historically lacked access to long-term investment opportunities.