As deals go, this one seems pretty good: $1,000 free from the federal government for babies whose parents sign them up for a “Trump Account,” the public-private investment accounts that went live on July 4.
Kevin O’Leary has called the accounts “better than Social Security,” the White House calls them a step toward “building generational wealth” and more than 6 million accounts for children under the age of 18 have already been created, according to the Treasury Department.
And President Donald Trump rang the opening bell of the New York Stock Exchange from the Oval Office on Monday to celebrate the launch of the accounts.
But not everyone is as enthusiastic. Talk-show host Dave Ramsey has called them a “political stunt” even though he still says parents should sign up.
Per The Washington Post, the accounts “are open to anyone under the age of 18 with a Social Security number and function like traditional IRAs, allowing investments in index funds.”
Only children born between Jan. 1, 2025, and Dec. 31, 2028, are eligible for the $1,000 seed money, which the Treasury Department says could grow to $6,000 by the time the child turns 18, even without any additional deposits.
Accounts that have deposits of $250 a year could be worth $19,000 by then, and those that have the maximum yearly deposit of $5,000 could be worth more than $300,000, the Treasury Department says. (“Actual results may differ and are not guaranteed,” the fine print on the Trumpaccounts.gov website says.)
Relatives, friends and even employers can make a contribution to the accounts. The child will have access to the funds the year they turn 18 for qualified expenses like college tuition or the purchase of a house.
The accounts are funded in part by more than 80 corporations who have pledged support, according to Treasury Secretary Scott Bessent, in addition to the more than $6.25 billion given by Michael and Susan Dell.
On social media, parents who registered their children for the accounts over the weekend were enthusiastic about the program, which also had support from Democratic Sen. John Fetterman of Pennsylvania, who plans to open accounts for his three children.
Some other Democrats have rather grudgingly acknowledged their value while wishing that they weren’t so overtly linked to a polarizing president.
“I wouldn’t leave free money on the table, I think that’s the bottom line,” Michael Pieciak, the Democratic treasurer of Vermont, said in an interview a few weeks ago.
Dave Ramsey, who met with Trump during the 2024 campaign and went on to endorse him, has called Trump Accounts more of a “political stunt” than a tool to build wealth.
“I’m a fan of some of the things the president is doing. I’m not a fan of some of the things the president is doing. I think this is a political stunt,” Ramsey said in February.
In its analysis of the accounts, the Ramsey Solutions website says, “Sure, if you have a baby born between 2025 and 2028, there’s nothing wrong with opening a Trump Account for them. A thousand bucks is a thousand bucks. We’re not going to say no when Uncle Sam goes full Oprah Winfrey and starts giving out money.”
But, the article cautions, “When you make contributions to a Trump Account, you’re basically trapping money inside an inflexible, unusable account. You and your children won’t be able to use that money for at least 18 years. And when your kids are able to take the money out, they’ll have to pay taxes on any investment growth from the account.”
Ramsey Solutions also notes that the government controls where the funds are invested, and that account holders will have to pay a penalty if they want to withdraw the money for unauthorized uses.
Ramsey’s company says that better options include the college-saving 529 and ESA plans, and a custodial Roth IRA.
But like the treasurer of Vermont, Ramsey Solutions says don’t leave free money on the table. “That’s a no brainer,” the Ramsey Solutions website says.