You’ve heard about Trump Accounts — the new investment accounts designed exclusively for children. Dollars in a Trump Account are invested in the market and the idea is for compound earnings to grow those funds over the long term.
Here are some common questions related to these new accounts —
- How do Trump Accounts work?
- What is the eligibility criteria for a Trump Account?
- How are Trump Accounts taxed?
- How much money will be going into Trump Accounts?
- Who is gifting money into Trump Accounts? Who is eligible to contribute?
- How are funds in a Trump Account invested?
- Where and how can I open a Trump Account?
All good questions. That’s not the purpose of this article, so you’ll need to look elsewhere for the answers.
Today I’m going to relate my first-hand experience on opening up a Trump Account. Four Trump Accounts, actually, as I have four young children at home. Of course, my experience may not reflect your experience or the experience of others. In this article I discuss the following —
- What to expect when opening up a Trump Account
- The detailed process of opening a Trump Account
- What you should know
- What surprised me most
What to Expect When Opening Up a Trump Account
Over a couple dozen financial institutions are approved as custodians for Trump Accounts, but I quickly learned that most of these institutions either made it confusing to figure how to open one or they aren’t yet up-and-running with this offering. I figured there must be a better way.
So I pulled out my phone and downloaded the Trump Accounts mobile app. The mobile app is intuitive, the path of least resistance, and easy to navigate. So that’s what I did. The accounts were opened in minutes.
The Detailed Process of Opening a Trump Account
As you would expect with any account opening through a U.S. financial institution, they’re going to need your and your children’s personal information.
You’ll provide names, dates of birth, social security numbers, etc. Everything you might expect. Then you need to prove you are who you say you are…
You need to take a selfie (of yourself, not the child) and upload photos of a government-issued ID. I provided the front and back of my driver’s license.
Next, the mobile app has a built-in feature for you to submit IRS Form 4547 electronically. This is the Trump Account Election form and is required to activate the account.
Once the IRS form is submitted, you’re at the final step and are invited to activate your account(s). Follow the prompts on the screen until you see that your form submission is processed.
You’ll select Activate account and a screen will appear showing the name(s) of your child or children, and whether he or she is eligible for the $1000 contribution.
From here, you are taken to an agreement disclosure screen of sorts which you’ll need to review and agree to. Note: this screen is where I learned that, though I’m on the Trump Accounts mobile app, the financial asset custodian for these dollars will actually be Robinhood Securities LLC behind the scenes. This surprised me because I actually went on the Robinhood mobile app first, before downloading the Trump Accounts app, and couldn’t find anything about opening this type of account on their platform directly.
What You Should Know
The big takeaway here — download the Trump Accounts mobile app. The process is fool-proof and you’re claiming free money for your children. It’s offered to you, so take it.
What Surprised Me Most
Here is what surprised me the most: I understood that my children, ages 8 through 2, were too old to be eligible for the $1000 benefit. That amount is only for children born between January 1, 2025 and December 31, 2028. With that said, Michael Dell (of Dell Computers fame) and his wife pledged to gift $250 to children 10 years old and younger who were born before January 1, 2025 — specifically those not eligible for the federal $1000 contribution.
After some research I learned that, as of this writing, while many families have already received the $1000 contribution from the government, that isn’t the case for the $250 Dell gifts. While the Dell family has pledged this gift amount, at this point no specific timeline is known about when these gifts will be deposited. If that changes, we’ll keep you posted!
How the Funds Are Invested
One more thing I should note: you’ll see a screen on the mobile app that reads What happens next? Here it explains that all contributions will be invested in SPYM. This is a low-cost ETF index fund that tracks the S&P 500.
On the Trump Accounts mobile app you can choose to contribute funds into the account(s) yourself, link your bank account, and swipe through various educational articles on investing.
Final Thoughts
My children’s Trump Accounts are now opened (though currently unfunded). I expect these accounts will be excellent teaching opportunities for my children as they come to understand investing and how compound earnings work. Things like birthday and Christmas money, etc., will be deposited here.
If you have questions on Trump Accounts, or anything related to your personal finances, at CameronDowning we’re happy to help if we can be of service.
