US President Donald Trump has introduced a government investment account program for newborns in the United States, and has also called on American companies to contribute to these accounts.
Points of attention
- US President Donald Trump introduced a government investment account program for newborns in the United States, with the government depositing $1,000 into each newborn child's account between 2025 and 2028.
- The accounts, named after Trump, aim to address health insurance affordability issues and 25 million families are estimated to be eligible to receive these funds.
Trump will give $1,000 to babies
"I believe that in a few decades, Trump's bills will be remembered as one of the most revolutionary innovations of all time," the US president said at an event where many babies were present to emphasize his administration's pro-family stance.
Reuters explains that the accounts named after Trump were created last year as part of the Republican tax-and-spending bill. They will be opened over the next three months, ahead of the November midterm elections, as Trump and the Republican Party seek to address health insurance affordability issues.
The US Treasury Department announced that it will deposit $1,000 into the investment accounts of all children born between 2025 and 2028. According to estimates, about 25 million families will be eligible to receive these funds.
The government will invest this money in low-cost index funds that grow tax-deferred. Income tax is only paid when the funds are withdrawn.
Official accounts will begin operating on July 4, 2026. According to Treasury Secretary Scott Bessant, more than half a million families have already registered.
Trump said that the results will be measured "not just by the wealth created, but by how young people buy homes that they could not have dreamed of before. It will be seen in the degrees earned, the companies founded, the families created, and the children born."
The White House, for its part, is urging families to make additional contributions to these accounts, and some private investors have already contributed more. Among such entrepreneurs is Michael Dell and his wife Susan, who have invested $6.25 billion.
According to White House press secretary Caroline Leavitt, these accounts will solve the problem of the lack of savings accounts for many American families.
The Trump administration expects that without additional contributions, by the time newborns reach adulthood, there will be $5,800 in their accounts.
Levitt added that if families contribute the maximum amount of $5,000 per year, by the time the newborn turns 28, the account could accumulate almost $1.1 million. However, she did not share the calculations of how the administration arrived at this amount.
According to financial analysts, with the maximum contribution up to 28 years, the investment portfolio will be about $700,000.
