How Much Money Trump’s Newborn Accounts Could Actually Grow To

Key Takeaways

• The One Big Beautiful Bill Act (OBBBA) created tax-advantaged savings accounts for minors, called Trump Accounts.
• Eligible babies born between 2025 and 2028 receive a $1,000 government seed deposit, with parents able to contribute up to $5,000 per year.
• Some reports claim these accounts could hit $1.9 million by age 28—but our projections suggest much lower totals.
• For families eligible for the free seed money, opening an account is a no-brainer. For others, alternative savings plans may be better.

What Are Trump Accounts?

The Trump Accounts were introduced under the One Big Beautiful Bill Act (OBBBA) as a way to help children build wealth from birth.

• Eligibility: U.S. citizens born between Jan. 1, 2025 and Dec. 31, 2028 automatically receive a $1,000 deposit from the Treasury, invested in a broad stock market index fund.
• Contributions: Parents may contribute up to $5,000 annually, while employers can add up to $2,500, though that counts toward the same $5,000 cap.
• Withdrawals: Funds remain locked until the child turns 18. At that point, the account converts into a Traditional IRA, allowing tax-deferred growth until retirement.
• Exceptions: Early withdrawals may be permitted for qualified educational expenses or a first-time home purchase (up to $10,000), but otherwise would trigger penalties and taxes.

👉 Children born outside the 2025–2028 window can still open a Trump Account, but will not receive the $1,000 government contribution.

How Much Could These Accounts Really Grow?

If You Only Take the $1,000 Seed Money

• At 10.1% average annual return (long-term S&P 500 return): about $5,652 by age 18.
• At a more conservative 5% return: around $2,407 by age 18.

If Parents Contribute the Maximum $5,000 Annually (Until Age 17)

• At 10.1% return: about $235,929 by age 18.
• At 5% return: around $143,068 by age 18.

By Age 28 (Continuing Growth, No More Contributions After 18)

• At 10.1% return: between $697,000 and $296,000 depending on market performance.
• Far below the $1.9 million projection some outlets have reported.

Who Benefits Most from Trump Accounts?

✅ Good Fit For:

• Families with children born between 2025 and 2028 (free $1,000 deposit).
• Parents who can max out annual contributions consistently.
• Employees whose employers add contributions toward their child’s account.

❌ Not Ideal For:

• Children born outside the eligible years without employer contributions.
• Families primarily saving for college (a 529 plan offers better tax perks).
• Children with earned income (a Roth IRA is often more advantageous).
• Parents who want greater flexibility (a custodial brokerage account may be preferable).

The Bottom Line

The Trump Account is a novel savings vehicle with undeniable appeal for those eligible for the government’s $1,000 starter deposit. While the idea of accounts growing to $1.9 million makes headlines, more realistic projections suggest balances closer to $300K–$700K by age 28—still substantial, but far from the hype.

For parents of newborns between 2025–2028, this is essentially free money worth claiming. For everyone else, proven alternatives like 529 college plans, Roth IRAs, or custodial accounts may offer better long-term advantages.