What a Trump Account Is and Who It's For
A Trump Account is a custodial investment account offered by Trump Media & Technology Group. It functions as a brokerage account where a parent or guardian holds legal ownership while a minor benefits from the investments. The account is designed to let families invest in stocks, exchange-traded funds (ETFs), and other securities on behalf of children.
Unlike a standard savings account at a bank, a Trump Account is an investment account—meaning the money goes into the stock market rather than sitting in a deposit account. The account holder (the adult) makes all investment decisions and controls all transactions until the child reaches the age of majority, typically 18 or 21 depending on your state.
Trump Accounts are relatively new to the market and are not as widely available or as established as other custodial investment options like UTMA (Uniform Transfers to Minors Act) accounts or 529 education savings plans offered by traditional brokerages.
Key Takeaways
- A Trump Account is a custodial investment account where you control the money until your child reaches adulthood, but the investments are exposed to stock market risk.
- Trump Accounts charge fees that vary by account type and may include monthly or annual costs, which can reduce your returns over time.
- More established alternatives like UTMA accounts through major brokerages, 529 plans for education, or Roth IRAs for teens offer similar or better features with lower costs and longer track records.
- Any investment account for a minor should match your family's risk tolerance and time horizon—money needed within five years should not go into stocks.
- Before opening any custodial account, compare fees, investment options, and tax treatment across providers rather than choosing based on brand alone.
How Trump Accounts Work and What They Cost
When you open a Trump Account, you deposit money that you control as the custodian. You choose how to invest that money from the options available through the platform. The child's name is on the account, but you make all decisions until they reach the age of majority in your state.
Trump Accounts charge fees that depend on the account tier. Monthly or annual fees apply to most account types, and these fees reduce the growth of your investment over time. A $500 annual fee on a $5,000 account costs you 10 percent of your balance each year—a much larger drag on returns than the same fee on a $50,000 account.
You should request the full fee schedule from Trump Media & Technology Group before opening an account. Compare those fees to what you would pay at other brokerages offering custodial accounts, where many charge zero annual fees for accounts under certain balances.
Tax Treatment and What Happens When Your Child Turns 18
Income and gains in a custodial account are taxed to the child, not to you. This can be an advantage if your child has little or no other income, because the first portion of investment gains may be taxed at a lower rate or not at all. However, if the account grows significantly, your child will owe taxes on those gains each year.
When your child reaches the age of majority (18 or 21, depending on your state), the account transfers to them completely. They then own and control all the money. You have no say in what they do with it—they can spend it, invest it differently, or withdraw it all at once.
This is different from a 529 education savings plan, where you retain control of the money even after your child turns 18, and the funds must be used for education or face tax penalties if withdrawn for other purposes.
Comparing Trump Accounts to Other Custodial Options
| Account Type | Who Controls the Money | Typical Fees | Tax Treatment | When Child Gets Access |
|---|---|---|---|---|
| Trump Account | Parent until age 18 or 21 | Monthly or annual fees (varies) | Taxed to child | Full control at age of majority |
| UTMA Account (major brokerages) | Parent until age 18 or 21 | Often zero annual fees | Taxed to child | Full control at age of majority |
| 529 Education Plan | Parent retains control | Often zero annual fees | Tax-free if used for education | Parent controls; penalties if not used for education |
| Roth IRA for Teen | Teen owns and controls | Often zero annual fees | Tax-free growth and withdrawals | Immediate (but withdrawal limits apply) |
UTMA accounts through established brokerages like Fidelity, Vanguard, or Charles Schwab offer the same basic structure as a Trump Account—you control the money until your child reaches adulthood—but typically charge no annual fees. You can invest in the same types of securities (stocks, ETFs, mutual funds) and the tax treatment is identical.
If your goal is to save for your child's education, a 529 plan offers tax-free growth as long as the money is used for tuition, room and board, or other education expenses. You keep control of the account even after your child turns 18, which means you can redirect the money if your child does not attend college or if circumstances change.
If your child has earned income from a job, a Roth IRA lets them save for retirement with tax-free growth. The money grows without being taxed each year, and withdrawals in retirement are tax-free. This is often a better use of a teenager's first earnings than a general investment account.
Questions to Ask Before You Decide
Before opening any custodial account, ask yourself what you are saving for and how long the money will stay invested. If you are saving for college and your child is 10 years old, you have eight years before the money is needed—enough time for stock market investing to make sense. If you are saving for a car your child will buy at 16, stocks are too risky because you cannot afford to lose money in a market downturn.
Ask whether you want to keep control of the money after your child turns 18. If you do, a 529 plan or a trust account may serve you better than a custodial account, which transfers full ownership to your child at the age of majority. If you want your child to learn to manage money and make their own decisions, a custodial account that transfers to them is appropriate.
Compare the total cost of ownership across platforms. Request the fee schedule for the Trump Account and compare it to the fees charged by Fidelity, Vanguard, Charles Schwab, and other major brokerages for UTMA accounts. A difference of $200 or $300 per year may not sound large, but over 10 years it compounds and reduces your returns.
Red Flags and What to Avoid
Be cautious of any account marketed primarily on the basis of a brand name or political affiliation rather than on fees, investment options, and performance. A good custodial account should be chosen because it costs less, offers better investment choices, or serves your specific goal—not because of who runs the company.
Avoid opening an account if you do not understand the fee structure or if the fees are significantly higher than what established brokerages charge. High fees are especially damaging in accounts for young children, where the money has decades to grow and compound. A 1 percent annual fee difference can cost you tens of thousands of dollars by the time your child reaches adulthood.
Do not assume that a new or less-established platform is riskier than a major brokerage in terms of account safety—most custodial accounts are protected by SIPC (Securities Investor Protection Corporation) insurance. However, newer platforms have shorter track records, which means less historical data about how they perform during market downturns or how they handle customer service issues.
Frequently Asked Questions
Can I move money from a Trump Account to another custodial account later?
Yes, you can transfer the account to another custodial account at a different brokerage. The process is called an ACAT (Automated Customer Account Transfer) and usually takes one to two weeks. You will not owe taxes on the transfer itself, but you should confirm that the receiving brokerage accepts ACAT transfers and that there are no fees for doing so.
What happens if I need the money before my child turns 18?
You can withdraw the money at any time—it is your account to control. However, if you withdraw investment gains (not just your original deposit), you will owe taxes on those gains in the year you withdraw them. The child will not face penalties, but you will owe income tax on the earnings.
Does opening a custodial account affect my child's financial aid for college?
Yes. Money in a custodial account in your child's name is counted as the child's asset on the FAFSA (Free Application for Federal Student Aid), which can reduce the amount of need-based financial aid they receive. Money in a parent-owned 529 plan is counted as a parent asset, which has a smaller impact on aid calculations. If financial aid is a concern, consult with a financial aid advisor before opening a custodial account.
Is a Trump Account FDIC insured?
No. FDIC insurance only covers bank deposits, not investment accounts. A Trump Account holds stocks and other securities, which are protected by SIPC insurance up to $500,000 per account. SIPC protects you if the brokerage fails, but it does not protect you from investment losses if the stocks you own go down in value.
Can my child contribute their own money to a Trump Account?
That depends on the account terms set by Trump Media & Technology Group. Some custodial accounts allow the minor to make deposits, while others do not. Check the account agreement before opening to confirm whether your child can add their own earnings to the account.