Are Trump accounts worth it? Dave Ramsey calls them a 'political stunt.' Here's what other experts are saying, and how to decide if one works for you

The U.S. Treasury will make a one-time $1,000 contribution to children who are U.S. citizens born on or after Jan. 1, 2025, through to the end of 2028. Some companies, including Intel, Uber and SoFi, have said they will contribute to accounts for children of employees.

But finance experts have mixed views. Dave Ramsey calls Trump accounts “a political stunt,” while others recommend grabbing the free money but prioritizing other accounts afterward (1).

For some parents, the addition of these new account options for their kids — on top of 529 college savings accounts, custodial IRA accounts and custodial brokerage accounts — has only added confusion over which offers the best benefits and whether funding one type of account should take priority over others.

What the experts are saying

Ramsey expanded on his concerns in a recent episode of The Ramsey Show.

“You’ve got other ways to save,” he said. “It’s not as revolutionary as the original Roth was. It’s not as revolutionary as the 529 is.” But he says there’s other ways to save, but “I don’t think it’s worth the trouble (1).

When you make contributions to a Trump account, “you’re basically trapping money inside an inflexible, unusable account” that your children won’t be able to use for at least 18 years, according to Ramsey Solutions (2).

At that point, they’re more like an IRA, so if you make withdrawals before age 59 1/2, they’re subject to a 10% early withdrawal penalty unless they’re used for approved expenditures like college or the purchase of a first home. Investment growth is also taxable.

“Withdrawals may be subject to restrictions and would be taxed at ordinary income rates,” according to Trumpaccounts.gov.

And, as Ramsey Solutions points out, the government controls your investments, which “limits your investment choices and gives you less control over how your hard-earned money is invested.”

The Money Guy says that while the account structure may be flawed, the $1,000 government contribution makes it worth opening one in certain cases, and that if you’re planning to have a child between now and the end of 2028, you don’t want to “turn down free money even if the account structure isn’t ideal,” he writes in a blog post. In other words, families could treat it as “free money” — opening the account to capture the incentive, even if they choose not to prioritize additional contributions afterward (3).

However, for most families, he says it may not make sense. “The tax treatment of the accounts makes them inferior to just about every other type of investment account you would consider opening for your child.”

And Vivian Tu, CEO of Your Rich BFF, said “Trump accounts have some benefits, but will disproportionately help the already wealthy” (4).

There could also be potential gift tax complications for contributors. Individual contributions don’t qualify for the annual gift tax exclusion, meaning you (the donor) will have to file a gift tax return (Form 709) for each contribution, even if it’s just the $25 contribution minimum. That can be an administrative headache and a tax compliance issue.

Consider your options

Any parent or guardian can set up a Trump account by filing Form 4547 along with their taxes. They will then be contacted by a trustee to complete the account setup, and the $1,000 seed funding will be available after July 4, 2026. Custodians can contribute up to $5,000 a year, while employers can contribute up to $2,500 toward that limit annually.

The accounts will be invested in “a diversified portfolio of low-cost index funds designed to maximize long-term growth while minimizing risk,” according to Trumpaccounts.gov. Even if families were to contribute nothing to the account, Trumpaccounts.gov estimates the account would grow to $6,000 by the time their child turned 18 (based on historical S&P 500 averages). If they contribute the maximum amount of $5,000 a year, it estimates they’d have $271,000.

“Projections like these are mathematically possible, but they rely on a very specific set of assumptions that deserve scrutiny,” Douglas Boneparth, CFP and president of Bone Fide Wealth in New York, told CNBC (5).

There are already several ways to save for your child’s future — and whatever you choose will depend on your personal circumstances and goals, as well as your liquidity needs.