Millions of children auto-enrolled in ‘Trump Accounts’: What to know

President Trump touted his administration’s investment accounts for children on Wednesday, as millions of American kids will now be automatically enrolled in the program.

Flanked by administration officials, business leaders and Sen. Ted Cruz (R-Texas) in the Oval Office , the president said the “Trump Accounts” will help children build wealth.

“If all goes well, which I think it will, they’ll end up being quite rich by the time they’re 18, and then 21 and as time goes by,” Trump predicted.

Here is what to know about the accounts, which the administration created under the One Big Beautiful Bill Act.

Auto-enrollment feature expands access to accounts

Under new rules the Treasury Department released last week, the federal government will automatically enroll children in the Trump Accounts program.

Treasury Secretary Scott Bessent said in a release the auto-enrollment feature will result in more than 60 million additional kids having an account. Trump said Wednesday that nearly 8 million children already had an account.

“Every family, every child deserves to have a piece of the American Dream, and these Trump Accounts are just that,” Bessent said Wednesday alongside the president.

Through auto-enrollment, every eligible child younger than 18 years with a valid Social Security number has an account, per the Treasury Department.

Social Security Administration (SSA) Commissioner Frank Bisignano said in the Oval Office that more than 10 million of the roughly 70 million accounts “are already funded” with $4.5 billion.

By this weekend, Bisignano predicted that 25 million children will have a combined $7 billion in their accounts, deeming the program a “startup.”

The SSA is also assisting in the enrollment process by allowing states to modify their hospital forms to include an option for parents to create an account for their newborn baby.

Trump, Cruz argue accounts will boost support for capitalism

Those who spoke in the Oval Office, including Cruz and Bessent, characterized the accounts in similar terms: an effort to create the next generation of American capitalists.

“You guys now own part of Apple. You own part of Dell Computers. You own part of McDonald’s,” Cruz said to a group of sixth- and seventh-graders in the Oval Office.

The federal government will automatically invest the accounts in the State Street SPDR Portfolio exchange-traded fund (ETF), which tracks the S&P 500. Parents will also be able to choose between four other ETFs to invest their child’s account in.

Bessent said those children are learning about “compounding” interest and the stock market through the accounts, which he called a “real-time financial literacy” project.

“We are creating a whole new generation of capitalists,” Cruz remarked.

Near the end of the event, Trump predicted the accounts will have a “huge effect” in limiting support for socialism and communism among younger Americans.

A recent Gallup survey found that 57 percent of Americans ages 18-34 had a positive view of socialism. A slew of democratic socialists also won primaries in deep-blue districts earlier this year.

“This is really the alternative [to socialism], and it’s a great alternative,” the president added of the accounts.

Accounts one of multiple available for children

The accounts add to the investment options parents have for their kids.

Parents already can open a custodial account to save for a child’s future major purchases, with control of the account transferring to the child at some point between their 18th and 25th birthdays, depending on the state.

Children who earn income can also have their parents open a Roth IRA for Kids account. Parents can contribute up to 100 percent of their child’s earned income each year, capped at $7,500 for 2026, according to Fidelity .

When considering a child’s educational future, a 529 account may be a better option, according to Tricia Scarlata of JP Morgan Asset Management.

“For families with education goals, the best approach may be to invest in a more advantageous 529 plan while using the seed money from a Trump account for establishing an early start to saving for other future needs including the purchase of a home or retirement,” Scarlata wrote in an August analysis .

Parents who open a 529 account can transfer funds to other eligible family members and roll over up to $35,000 to a Roth IRA in the beneficiary’s name.

The money in the accounts, which children can use to pay for two- to four-year colleges, graduate schools and student loan payments, among other expenses, also grows tax-free, Scarlata noted.

Earnings on Trump Accounts, on the other hand, are taxed when withdrawn.

Trump, Republican lawmakers and corporate America are not alone in backing the program.

Maryland Gov. Wes Moore (D) praised the accounts as “smart policy,” comparing them to baby bonds.

Economists Darrick Hamilton and William Darity first proposed baby bonds in 2010, arguing it would address the racial wealth gap.

Under their proposal, the government would make an initial deposit into an interest-bearing account for each newborn baby and make additional deposits throughout their childhood — with the most money going to low-income children.

“One of the fastest ways that you can address both the … child poverty [issue] and the racial wealth gap is actually baby bonds,” Moore said in July on the “Clay Cane Show.”

The administration is not specifically targeting low-income children’s accounts. But a $6.25 billion donation from Dell CEO Michael Dell and his wife, Susan Dell, is directed at children who live in ZIP codes with a median family income of $150,000 or less.

The $250 per child deposits are expected to be made by the end of Friday, according to Invest America .

While Sen. Cory Booker (D-N.J.) joined every congressional Democrat in voting against the One Big Beautiful Bill Act, he praised the accounts as a “once-in-a-generation expansion of economic opportunity” last year.

“We believe these accounts — much like 401(k)s — represent a transformative tool for building long-term financial security, expanding economic prosperity, and fundamentally restoring confidence in American capitalism,” Booker and Cruz wrote in a letter they sent to Fortune 1000 CEOs urging them to donate to the accounts of their employees’ children.

Even California Gov. Gavin Newsom (D), a fierce critic of Trump, called the accounts one of the “best things” the president has done.

“It’s direct, it’s tangible, it’s results-oriented, it’s not lost to bureaucracy,” Newsom said in August, while encouraging parents to open accounts for their children.