The U.S. Treasury Department unveiled proposed guidance Thursday governing eligible investment options for Trump Accounts, a new tax-deferred savings vehicle created for children to encourage long-term wealth accumulation. The framework specifies that qualifying investments must track broad segments of U.S. or global equity markets using objective financial criteria and maintains restrictions on expense ratios to keep costs minimal.
Treasury Secretary Scott Bessent stated that the guidance prioritizes straightforward, low-cost investment selections to maximize the portion of returns retained within accounts. The framework emphasizes that minimizing fees ensures more investment growth directly benefits children’s financial futures. Officials noted that even modest annual cost differences can compound significantly over decades of investing.
Bank of New York Mellon currently serves as the official manager for newly established Trump Accounts, with the proposed rules also applying to future trustees should families transfer assets to different custodians. Currently, contributions are invested in exchange-traded funds tracking the S&P 500, with the State Street SPDR Portfolio S&P 500 ETF designated as the default option at inception.
The investment menu includes several additional ETF options: iShares Core S&P 500 ETF, Vanguard Total Stock Market ETF, State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF, and iShares Core S&P Total U.S. Stock Market ETF. Families can monitor account activity through the Trump Accounts app, developed in collaboration with Robinhood, which enables tracking from account opening onward.
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