How to Make the Most of Investment Accounts for Children

The Treasury Department and the IRS are rolling out a new investment account designed to start at birth.

If you saw the Invest America Super Bowl ad last weekend—the one with kids narrating the promise of a real jumpstart—you weren’t alone.

The Treasury Department and the IRS are rolling out a new investment account designed to start at birth, with the money belonging to the child. More than a million families submitted early elections and hundreds of thousands more followed right after the game. The accounts themselves are expected to launch in July 2026, but the rules that determine how they work are being set now.

If you’re planning to have children—or may in the future—you’ll want to understand what these accounts are designed to do. While the launch is still ahead, the most important decisions are happening now.

They’re called Invest America Accounts (you may also hear them called “Trump accounts” or “530A accounts”).

How “Trump accounts” work

For children who qualify, the account is seeded with a one-time $1,000 government contribution to get it started.

A parent or authorized adult has to elect to open the account through the tax system. The Treasury and IRS have confirmed this election is tied to your federal tax return, not a brokerage firm. The newly released IRS Form 4547 is used to make that election and to request the $1,000 seed.

If no election is made, the Treasury has said the account may be created automatically when a tax return is filed. How that works in practice is still being finalized. Either way, it’s triggered through the tax system.

At the start, the account is administered by the U.S. Treasury through a designated financial agent. Parents don’t choose a brokerage right away. Over time, families may be allowed to move the account to a private custodian, but the Treasury’s custodian is the starting point. That structure keeps costs low and guardrails tight early on.

Once active, the money is invested only in broad, low-cost U.S. stock market index funds. Think: a 401(k) for a baby, with a very limited investment menu on purpose.

Parents control the account while the child is growing, but the child owns it. The money is locked up until age 18—by design. After that? Let’s be honest. An 18-year-old can still do something impulsive, like buy a cool new Jeep. The difference is there are real tax consequences and penalties if the money isn’t used according to the rules. Ouch.

Adding money

Before the child becomes an adult, families can add money over time, up to $5,000 per year. It creates a simple way for family members to make meaningful gifts that support education or other long-term goals.

Starting in July 2026, employers may also be allowed to contribute—up to $2,500 per year, tax-free to the employee, counting toward that same annual limit. Whether employers embrace this is still an open question, but it’s part of the design.

One important detail that’s easy to miss: the government’s one-time $1,000 seed contribution is limited to children born between January 1, 2025 and December 31, 2028. Timing matters. Older children can still have Trump accounts opened and funded by family contributions—they just won’t receive the seed.

Used alongside tools like 529 plans—and paired with clear, practical education—Invest America Accounts could become one of the most meaningful on-ramps to financial literacy we’ve ever had. For families already saving for college, this is also a moment when a fee-only fiduciary advisor can help connect the dots so these accounts work together instead of sitting in silos.

The real opportunity

I served on the board of the California Jump$tart Coalition, focused on financial literacy from kindergarten through college. One thing has always been clear: it’s incredibly hard to teach kids about money when it’s abstract.

This changes that.

Having an account in a child’s name makes ownership real. Compounding isn’t theoretical anymore. Market ups and downs suddenly have context. It nudges families from just getting by toward planning ahead—especially those who’ve never invested before.

Even if a family never adds another dollar, a $1,000 seed invested at a modest 7% annual return could grow to roughly $3,300–$3,500 by age 18. Add just $83 a month starting early, and that number climbs to roughly $38,000–$40,000. That’s the power of time and consistency.

I can’t think of another program in my lifetime with this kind of structure and so little downside. Child investment accounts aren’t new—versions of baby bonds have drawn bipartisan support for years.

The real risk is education. If families don’t understand how to use the account, an 18-year-old could treat it like free money instead of a foundation.

Right now, families can take a concrete step by filing IRS Form 4547 with their 2025 federal tax return. Submitting the form doesn’t move money yet, but it locks in eligibility and requests the $1,000 government seed if the child qualifies.

Account activation and funding come later. Treasury has said authentication details will be issued beginning in mid-2026, and no contributions—including the seed—will be deposited until the accounts officially open in July 2026.

That’s the real headline. The money comes later. The decisions—and the chance to get this right—are happening now.

And this time, we actually have the chance to get that part right.