Trump’s $1,000 Baby Bonus: Who Qualifies, Who Doesn’t And How The Money Can Be Used

United States President Donald Trump announced on Tuesday that billionaire Michael Dell and his wife, Susan, will contribute $6.25 billion into individual accounts for 25 million children under 10. This has prompted a fresh wave of speculations about the Trump Accounts for underage Americans.

The initiative was created under Trump's One Big Beautiful Bill Act, signed in July. Under this, US children are expected to benefit from a long-term financial scheme. Through 'Trump Accounts', eligible children will receive a $1,000 initial deposit from the US Treasury, which will be invested.

Trump described them as “the first real trust funds for every American child,” allowing contributions from family, employers, corporations and donors, according to a Guardian report.

The Dell couple's investment amounts to $250 per account for eligible children. This money will go to the zip codes where the median household income is below $1,50,000 a year, according to The New York Times.

As part of the press conference on Tuesday, the White House also provided further information about the future of Trump Accounts. 

Who Is Eligible?

A Trump Account can be opened by parents for their children under 18 with a Social Security number. However, to receive the $1,000 seed money, a child must be born between Jan. 1, 2025, and Dec. 31, 2028. 

These accounts will not become active until July 4, 2026, meaning deposits and investments cannot begin until that date. Parents and guardians are responsible for setting up and managing the accounts.

Children, parents, guardians, family, friends, and employers can contribute up to $5,000 per year per child to Trump Accounts. Philanthropists, charities and certain government entities may be able to contribute without any limit.

How Can Money Be Used?

The money put into Trump Accounts will be invested in a diversified, low-cost stock index fund that tracks the overall stock market. These funds will be managed by private companies. Withdrawals are only allowed once a child turns 18. 

At that point, the account functions like a traditional retirement account, meaning withdrawals could incur significant tax penalties, according to Guardian. However, the White House said there will be exceptions for specific purposes, such as higher education expenses or purchasing a first home. 

On the funds, critics claim that Trump Accounts may primarily benefit the wealthy, acting as a tax shelter. They argued that, without support from programmes like Medicaid, most families cannot turn the initial seed money into meaningful investments, the Guardian report added.