May 14, 2026
Americans spent an estimated $38 billion (1) on gifts this Mother's Day, including traditional presents like brunch and flowers. Meanwhile, the Trump administration honored them with a new website, Moms.gov (2).
Designed to provide new and expectant mothers with resources and information, it includes a resource link to Trump Accounts, a tax-advantaged investment account (3) for children under 18 years old.
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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.
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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.
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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.
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You can contribute up to $7,500 a year (as of 2026) to a traditional IRA. In contrast, you can only contribute up to $5,000 a year to the Trump account.
Trump Accounts versus 529 accounts
Designed for educational savings, 529 accounts offer higher (6) contribution limits than Trump Accounts, contributions can grow tax-free, and withdrawals can be made tax-free for qualifying educational expenses.
Some states even offer state tax deductions for 529 account contributions. Plus, some unused funds in a 529 can roll over into Roth IRA accounts when money is left over after paying for education, and those who open these accounts can change beneficiaries.
Trump Accounts versus UTMA and UGMA custodial accounts
Then there are UTMA (Uniform Transfers to Minors Accounts) and UGMA (Uniform Gifts to Minors Act) custodial accounts (7). There are no limits on contributions or withdrawals on these accounts and they offer a much broader choice of investments than Trump Accounts.
While they don't allow for tax-deferred growth on the entire account, part of the earnings are tax-exempt and part are taxed at the child's tax rate.
It's a good idea to consider the pros and cons of all of these options for the children in your life, perhaps talking to a financial advisor. Your children will thank you.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
National Retail Federation (1); Moms.gov (2); Internal Revenue Service (3),(4); Trump Accounts (5); Fidelity (6); Saving for College (7)
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Christy Bieber has 15 years of experience as a personal finance and legal writer. She has written for many publications including Forbes, Kilplinger, CNN, WSJ, Credit Karma, Insurify and more.
