Your child’s Trump Account will be invested automatically in a default exchange-traded fund (ETF) that provides broad exposure to U.S. companies. All contributions will be automatically invested in SPYM, an index fund that tracks the S&P 500 by holding hundreds of the largest U.S. companies.

Funds in Trump Accounts will generally remain invested and are not available for withdrawal before the child reaches age 18. Until December 31 of the calendar year in which the child (account beneficiary) reaches age 17, the account has a $5,000 annual contribution limit that is separate from other IRAs that the child may have.

Until the child (account beneficiary) reaches age 18, the following rules apply:

• Can only be invested in eligible investments, and
• Distributions are generally restricted from the account.

Note that after December 31 of the year the child turns 17, no new contributions can be made until the child reaches the age of 18 and the account transitions to a traditional IRA.

The person who is electing to open and then activates the account for a qualifying child, typically a parent, legal guardian, or other authorized individual, can manage the account until the child reaches the age of 18.

After your child’s Trump Account is activated and can accept contributions, you can track all account transactions, such as contributions and investment activity within the account’s history in the app.

The money is automatically invested and held in a dedicated trust account with a registered trustee, with all securities transactions cleared through the Depository Trust and Clearing Corporation (DTCC). This program operates in partnership with a federal record keeper and banking partner. Additionally, your child's investments are protected by SIPC coverage up to $500,000 based on your child’s information. Keep in mind though that SIPC does not protect against losses due to market fluctuations. Explanatory brochure available upon request or at www.sipc.org.

Authorized individuals must first elect to open a Trump Account using IRS Form 4547. Once an election is processed, there are no fees to activate or maintain the account, including when contributions are made or invested. All contributions go into the account at no cost to the responsible party or the account beneficiary. However, the investments in the account may be subject to management fees (also called expense ratios). These fees cannot exceed 0.1% of your investment balance and are built into the fund's value automatically—they won't appear as a separate charge to your account.

Funds remain invested in the account and any dividends or capital distributions from the holdings will be reinvested. This long‑term investment approach is designed to help accounts grow steadily until a child reaches age 18.

Same as traditional Individual Retirement Accounts (IRAs), Trump Account earnings are tax deferred and will remain tax deferred until the money is eventually withdrawn. This means the child (the account beneficiary) won’t pay taxes on investment gains on an annual basis as long as the funds remain invested in the account. When the child reaches age 18, the account will transition from a Trump Account to a traditional IRA without the special rules. After this transition, a child can make distributions (withdrawals) of any part of the account. Account earnings, pilot contributions, or qualified general contributions are subject to ordinary income tax, and a 10% early distribution tax may apply if the beneficiary is under age 59½ when the withdrawal occurs (and another exception does not apply).

Note that individual contributions are after-tax (no upfront deduction), while employer and government contributions are generally pre-tax. The contributions made by individuals (parents or family) are considered "basis" and are tax-free when withdrawn. However, distributions (withdrawals) cannot typically be made until the beneficiary (the child) reaches age 18. Unlike other IRAs, no withdrawals are permitted for any reason before the child reaches age 18.

You’ll get a Form 5498-TA from the IRS for contributions made to the account for the applicable tax year. For permitted distributions, you’ll receive a Form 1099-R.

We do not provide tax advice. For specific questions, consult a tax professional.