A Trump Account is a custodial investment account for minors, not a savings account
A Trump Account is a branded investment account designed for children and teenagers, offered through Trump Media & Technology Group. It functions as a custodial account, meaning a parent or guardian controls the account and makes investment decisions on behalf of the minor until they reach the age of majority (usually 18 or 21, depending on state law).
The account is not a bank savings account. Money in a Trump Account is invested in securities—typically stocks, bonds, or funds—rather than held in cash. This means the account value can go up or down based on market performance. The account holder (the adult) receives statements showing holdings and gains or losses, and the minor's name appears on the account documents.
Trump Accounts are offered as part of a broader push to introduce younger people to investing and wealth-building. They are not government-backed, FDIC-insured, or tied to any federal youth savings program. They are a private financial product.
Key Takeaways
- A Trump Account invests money in securities on behalf of a minor, not a savings account that holds cash.
- A parent or guardian controls all decisions and account activity until the minor reaches the age of majority.
- Account value fluctuates with market performance, so there is no may provide return or protection against loss.
- The account is a private product and is not insured by the FDIC or backed by any government program.
- Fees, investment options, and account minimums vary and should be reviewed before opening.
How a custodial account works in practice
When you open a Trump Account for a minor, you provide your own identification and financial information. The minor's Social Security number is used to establish the account, but the adult is the account owner and decision-maker. You choose what investments to hold—for example, individual stocks, index funds, or bond funds—and you decide when to buy or sell.
The minor does not make trades or manage the account themselves, even as they get older. You retain full control until the account transfers to the minor at the age of majority set by your state. At that point, the minor becomes the sole owner and can do whatever they want with the money.
Statements and tax documents go to the adult account holder. If the investments generate income (dividends, interest, or capital gains), that income is reported on the minor's tax return, not the adult's. This can have tax advantages in some cases, because minors often have lower tax brackets than their parents.
Fees, minimums, and what you need to know before opening
Trump Accounts charge fees for account management, trading, or advisory services. The exact fee structure depends on the specific product offering and the investment options you choose. Some accounts charge a flat annual fee; others charge per trade or take a percentage of assets under management. You should request a fee schedule before opening an account.
Most custodial investment accounts have a minimum deposit to open—often $500 to $2,500, though this varies. Some allow smaller initial deposits if you commit to regular monthly contributions. Check the current minimum for the specific Trump Account product you are considering.
Investment options typically include stocks, mutual funds, and exchange-traded funds (ETFs). The range of choices depends on the brokerage platform used. You should review what investments are available and whether they align with your goals for the account.
Tax treatment and reporting
Income generated in a Trump Account—such as dividends or interest—is taxed in the minor's name, not yours. This can be advantageous because minors often have lower tax rates. However, there are limits. The IRS has rules about how much unearned income a dependent can receive before taxes are owed. For 2024, a dependent with more than $1,300 in unearned income generally owes tax on the amount above that threshold.
Capital gains (profit from selling investments at a higher price than you paid) are also taxed in the minor's name. Long-term capital gains—from investments held more than one year—are taxed at lower rates than short-term gains.
You will receive a 1099 form or similar tax document each year showing the income earned in the account. You report this on the minor's tax return. Consult a tax professional if you are unsure how to report account income.
Transferring the account when the minor turns 18 or 21
When the minor reaches the age of majority (18 in most states, 21 in a few), the account automatically transfers to them as the sole owner. You no longer have control. The minor can then withdraw the money, continue investing, or change the investment strategy however they wish.
The transfer is automatic—you do not need to do anything. However, you should discuss with the minor what will happen to the account and what your expectations are. Some families use this as a teaching moment about money management and long-term investing.
If the minor dies before reaching the age of majority, the account becomes part of their estate and is handled according to your will or state law. Discuss this scenario with an estate planning attorney if you have concerns.
Comparing Trump Accounts to other custodial options
Custodial accounts come in several forms. A Uniform Transfers to Minors Act (UTMA) account or Uniform Gifts to Minors Act (UGMA) account are the most common alternatives. These are offered by most brokerages and banks and allow you to invest on behalf of a minor in much the same way a Trump Account does.
The main differences are the brand, the specific investment options offered, and the fee structure. UTMA and UGMA accounts are standardized by state law, whereas a Trump Account is a branded product with its own terms. Compare the fees, investment choices, and account minimums across options before deciding.
A 529 college savings plan is another option if your goal is specifically to save for education. Money in a 529 grows tax-free if used for may have access to education expenses. A Trump Account or other custodial investment account has no such restriction—the money can be used for anything once the minor takes control.
Risks and what can go wrong
The primary risk is market loss. If you invest in stocks or stock-based funds and the market declines, the account value will fall. There is no may provide of return, and you could end up with less money than you put in. This is true of any investment account, not just Trump Accounts.
A second risk is that you may not have full control over how the account is managed once it transfers to the minor. If you intended the money for a specific purpose—such as college—but the minor withdraws it for something else, there is nothing you can do legally once they turn 18 or 21.
A third consideration is that a custodial account in the minor's name can affect their financial aid may be able to access for college. Schools count student-owned assets more heavily than parent-owned assets when calculating how much aid to offer. Consult a financial aid advisor if this is a concern.
Frequently Asked Questions
Can I close a Trump Account before the minor turns 18?
Yes, you can close the account at any time as the account owner. However, you should understand the tax consequences of selling investments—any capital gains will be taxed in the minor's name. Also consider whether closing the account aligns with your long-term savings goals for the child.
What happens if I want to withdraw money from the account?
As the account owner, you can withdraw money, but it must be used for the benefit of the minor. Using account funds for your own personal expenses can create legal and tax problems. Consult a tax professional or attorney if you are unsure whether a withdrawal is appropriate.
Is a Trump Account the same as a regular savings account?
No. A savings account holds cash and earns interest; a Trump Account invests in securities like stocks and funds. Savings accounts are FDIC-insured up to $250,000; investment accounts are not. The account value in a Trump Account can go down as well as up.
Do I need a Social Security number for the minor to open an account?
Yes. The minor's Social Security number is required to open a custodial account. If the minor does not have one, you will need to obtain one from the Social Security Administration before opening the account.
Can the minor see or access the account before turning 18?
That depends on the account terms and your preferences. Some custodial accounts allow read-only access for the minor so they can see the balance and learn about investing. Others keep the account completely private until the transfer. Check the account agreement or ask the provider what options are available.