If you have a child under 18 and have never owned a single share of stock, Treasury Secretary Scott Bessent has a message for you: The federal government wants to give your kid a head start.Bessent told Yahoo Finance that 38% of American households have no exposure to the equity markets, meaning they miss out entirely when stocks climb and corporate earnings expand.Trump Accounts, the government-seeded investment accounts that officially launched on July 4, are his answer to that disparity, and more than 6 million children have already been signed up, the Treasury Department reported, according to CBS News.How Trump Accounts work and who qualifies for the $1,000 seedTrump Accounts, created under the One Big Beautiful Bill Act, function as custodial traditional individual retirement accounts for children under 18.Children born between Jan. 1, 2025, and Dec. 31, 2028, who hold a valid Social Security number and are United States citizens, qualify for a one-time $1,000 contribution from the U.S. Treasury.Parents, grandparents, and other individuals can contribute up to $5,000 per year in after-tax dollars, while employers may add up to $2,500 toward the same cap. That limit will be indexed for inflation starting after 2027, with the first adjustment taking effect in 2028.No earned income is required, which sets Trump Accounts apart from custodial Roth IRAs that depend on a child having a job before contributions can flow in.Bessent frames the accounts as a fix for the stock market wealth divideBessent has placed stock ownership inequality at the center of his pitch, and the data support the scale of the problem.The top 10% of Americans hold more than 87% of corporate equities and mutual fund shares as of the first quarter of 2026, according to the Federal Reserve’s Distributional Financial Accounts.Treasury Secretary Scott Bessent said Trump Accounts aim to bring Americans without investments into the capital markets.They don’t share in the upside, our innovation, our capital markets…. One of the goals of the Trump Accounts is to get everybody in.UBS found that global personal wealth grew 10.8% in 2025, driven by strong financial markets, rising property values, and U.S. dollar depreciation, which amplified the value of wealth measured in dollars outside the United States.Bessent told CBS News that he wants to push the 38% non-investor figure toward zero over time by creating a straightforward on-ramp for families that have never participated in capital markets.
Treasury Secretary Scott Bessent says Trump Accounts could expand stock ownership by giving millions of Americans a simple path into capital markets.Bloomberg/Getty Images
Corporate pledges are adding billions to Trump AccountsMichael and Susan Dell committed $6.25 billion to fund $250 deposits for up to 25 million children aged 10 or younger, Time reported.To qualify, a child must have been born before Jan. 1, 2025, making them ineligible for the federal $1,000 seed, and live in a ZIP code with a median income of $150,000 or less.Micron also pledged to match $1,000 in contributions for employees’ children and to provide $250 deposits for children in communities where it operates across seven states.More than 50 companies have committed to offering contributions, and Bessent told Yahoo Finance that more pledges from philanthropists and corporations are expected soon.Experts flag downside of Trump Accounts: tax treatment and return projectionsThe administration projects that a $1,000 seed with no further contributions could grow to about $6,000 by age 18 and roughly $243,000 by age 55, based on S&P 500 historical averages above 10% annually.Morningstar’s market simulations produced an average annual return of 6.3% over the next decade, significantly below those assumptions, CNBC reported.More Personal Finance:Bank of America offers critical debt elimination planFidelity challenges long-standing retirement savings ruleGallup data expose record financial anxiety in the U.S.Tommy Lucas, a certified financial planner at Moisand Fitzgerald Tamayo in Orlando, told CNBC that taxes on Trump Accounts are deferred rather than eliminated, and every dollar of growth will be taxed as ordinary income when the child withdraws funds.Adam Michel, director of tax policy studies at the Cato Institute, called Trump Accounts “the least tax-advantaged savings account available to families” in a June 2026 Cato at Liberty essay.This is because ordinary-income treatment at withdrawal can produce a steeper tax bill than long-term capital gains rates in a standard brokerage account.Contribution gaps could widen the wealth divide Trump Accounts aim to closeConnecticut Treasurer Erick Russell estimated that a wealthy family contributing $5,000 per year could build a $150,000 nest egg by the time their child turns 30, while a child from a low-income family is “likely to be left with about $2,500,” according to the Brookings Institution analysis. Jeffrey Levine, chief planning officer at Focus Partners Wealth, cautioned that families should evaluate whether a Trump Account is the best destination for their savings compared with 529 plans or custodial Roth IRAs, CNBC noted.What families with young children should know before contributingEnrolling costs nothing, and for parents of children born between 2025 and 2028, claiming the $1,000 seed deposit requires only an IRS Form 4547 submitted by e-filing with a federal tax return, mailing a paper copy, or filing electronically through an IRS Online Account.The accounts offer a genuine entry point into capital markets for households that have never invested, and the $1,000 government contribution carries no repayment obligation, Erica Sandberg, a money expert at BadCredit.org, noted.The seed deposit opens the door, but consistent contributions, long-run market returns, and careful tax planning will determine whether the account grows into a genuine wealth-building tool.Related: Should you open a Trump Account?