Trump’s new Moms.gov website is promoting Trump Accounts for kids — but are they actually the best way to save for your child’s future?

The IRS reports that by March 31, more than four million children were signed up for these accounts, created by the One Big Beautiful Bill Act.

Should moms (or other parents) click the "Enroll my child" link on Moms.gov (2)? Or, are other existing accounts a better way to save for your child's future?

How Trump Accounts work

The accounts are modeled after a traditional IRA, which is a tax-advantaged retirement account.

Eligible individuals can enroll in Trump Accounts using IRS Form 4547, Trump Account Election(s) (4), or online at trumpaccounts.gov (5).

Parents, guardians, and other authorized individuals can create a Trump Account for minors who won't turn 18 during the tax year. The account is in the child's name but under their parent or guardian's control until the child reaches the age of 18.

Children born between Jan. 1, 2025, and Dec. 31, 2028, will also get $1,000 from the U.S. Treasury to seed the account if they're U.S. citizens and have a Social Security number.

Withdrawal options are limited until Dec. 31 of the year before the child turns 18. After that, the account can be treated like a traditional IRA, with normal restrictions on withdrawals before age 59 ½.

The contribution limit for Trump Accounts is $5,000 per year, and that's indexed to inflation, so it will increase in subsequent years.

Contributions can come from a nonprofit, any adult, or from the federal, state, local, or tribal government. Employers can also contribute up to $2,500 per employee, and the contributions they make aren't included in an employee's taxable income. Contributions can begin after July 4, 2026, and the child doesn't need earned income.

The money in the account can be invested in a short list of eligible investments, including mutual funds and exchange-traded funds.

How Trump Accounts stack up against other options

While the $1,000 in federal seed money is a great benefit for kids who qualify, it's important to compare the relative benefits of Trump Accounts to other types of tax-advantaged investment accounts for children, as they may not always be the best option.

Trump Accounts versus IRAs

First, a comparison to IRAs themselves. Most kids can't contribute to a regular IRA because earned income is required to do so, but if they make money from acting, modeling, babysitting or other work, you can set up an IRA in their name.

IRA contributions are tax-deductible, Trump Account contributions are not.