What Grandparents Should Know About Trump Accounts

As a parent, you might be following the news of Trump Accounts carefully—especially if you have a baby who qualifies for the $1,000 in seed money, or your employer announced their plan to match any contributions you make. But your child’s grandparents (or beloved aunts and uncles) might not be as up-to-date on these new tax-advantaged investment accounts for kids. If they are looking for ways to help you save for your child’s future, go ahead and share this article with them.

What is a Trump Account? 

A Trump Account (aka 530A) is a new tax-advantaged investment account for kids under the age of 18. They were created as part of the One Big Beautiful Bill Act, and they will roll out in July 2026. 

Babies born between 2025 and 2028 may qualify for $1,000 in seed money from the federal government. Money in the account is invested in low-cost index funds that track U.S. based companies. The goal of a 530A is long-term savings, and money in the account can’t be accessed until the child turns 18, and even then it can only be used for certain expenses, such as paying college expenses or buying their first home. If the money is withdrawn before the child turns 18, they’ll have to pay a penalty and taxes.

A 530A works a bit like a 529 account in that friends and family can contribute to the account. They’re also a bit like an IRA, as there are limits on how much you can contribute each year. Once the accounts become available in July 2026, families can contribute up to $5,000 per child per year. (This amount will be adjusted for inflation in the future, just like how the IRA limits increase most years.)

How can grandparents get involved?

Primary caregivers—parents, legal guardians, grandparents, or adult siblings—can open a 530A for qualified children (one account per kid), but anyone can put money into the accounts as long as the contribution limits aren’t exceeded. 

Trump Accounts do have tax advantages—investment earnings grow tax free until the money is withdrawn. But contributions to a 530A account are not tax deductible. In the case of 529 accounts, in most states, contributions to the account that aren’t made by the primary account holder are also not tax deductible. 

There are a lot of details we still don’t know about 530A accounts, including which financial institutions will hold the accounts. There’s also a big question mark about how the gift tax will work. It’s worth noting because it could be different from a 529.

Contributions to a beneficiary’s 529 count toward your annual gift tax exclusion, which is $19,000 in 2026. Since money in a 530A account can’t be accessed until the child turns 18, a contribution is technically considered a “gift of future interest,” which would require you to file a gift tax return. This is one big reason financial advisors are recommending their clients wait until there’s more clarity on these accounts before they start contributing to them.

There will likely be more information available from the Treasury Department ahead of the accounts becoming available in July.

How do Trump Accounts compare to other investment options for grandparents?

“There’s still a lot we don’t know about Trump Accounts, so I wouldn’t make them the default answer for grandparents just because they’re new,” says Douglas Boneparth, CFP and president of New York City-based Bone Fide Wealth. “I’d start with a simpler question: What is the money for?”

If they are interested in helping save for their grandchild’s education, a 529 offers many tax advantages, says Boneparth, and it doesn’t have the same contribution limits as a 530A. Grandparents may also decide to directly pay tuition to their grandchild’s school or college, as such an expense does not count toward the annual gift tax exclusion.

If grandparents want more control over the investment options, they could consider an UTMA (Uniform Minor Transfer Act) account. An UTMA account is a custodial brokerage account overseen by a parent or guardian. Parents and grandparents can contribute as much as they like, though it’s subject to the same federal gift tax rules as a 529.

“Families need to be comfortable with the fact that the money [in an UTMA account] ultimately belongs to the child,” says Boneparth.

Another choice, says Boneparth, is to “skip all three options and keep the money in a grandparent-owned investment account, where the purpose, timing, and control remain flexible.” That way the grandparent can determine how they want to use the money—whether it’s for a car, travel, rent, or helping a young adult get started—and not get bogged down by the many rules and regulations around these custodial accounts.

How do Trump Accounts compare to other custodial investment options?

Here’s a high level comparison of how these accounts work.

What else to consider

Ultimately, it’s up to the grandparents to determine how much they are willing to give to support their grandchildren—and via what savings vehicle. It’s important that any contributions don’t come at the expense of their own retirement and living expenses. 

Another important thing to remember? Don’t go “chasing the headline,” says Boneparth. If the goal is long-term wealth building, “a modest, consistent annual gift is usually more practical,” and can have impactful long-term consequences for the child who is lucky enough to benefit from their grandparents’ love and support.