The Treasury Department released proposed guidelines Thursday establishing eligibility criteria for investments within Trump Accounts, a new tax-deferred savings program for children also designated as 530A accounts. The framework aims to create a foundation for long-term financial growth beginning in childhood.
Under the proposed rules, eligible index investments must be structured to track the performance of broad U.S. or global equity market segments using objective financial criteria, with a particular emphasis on products featuring low expense ratios. Treasury officials characterized the approach as prioritizing straightforward investment vehicles that would allow accumulated returns to remain within children’s accounts rather than being diminished by fees. Treasury Secretary Scott Bessent stated that the guidance reflects an effort to establish “simple, commonsense protections” enabling families to preserve more of their investment gains.
Bank of New York Mellon currently serves as the official administrator for newly established Trump Accounts. The proposed guidelines would also apply to future trustees should families decide to transfer assets to alternative custodians. Currently, Trump Account contributions are invested in exchange-traded funds tracking the S&P 500, with State Street SPDR Portfolio S&P 500 ETF designated as the default investment option at launch. Additional available investment options include several broad market-tracking ETFs from providers including iShares and Vanguard.
Families can monitor account activity through the Trump Accounts app, developed in partnership with Robinhood. Robinhood’s CEO noted that while future investment options may expand, the current default diversified portfolio approach has proven effective for initial account holders. Treasury and IRS officials emphasized that modest annual cost differences on long-term investments can produce meaningful impacts on funds available to account holders in adulthood.
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