What a Trump Account Is and Who Can Open One
A Trump Account is a custodial savings account for children, offered through participating banks and financial institutions. The account is held in the child's name but managed by a parent or legal guardian until the child reaches the age of majority (usually 18 or 21, depending on your state and the bank). The money in the account belongs to the child, and any earnings—interest or investment gains—are taxed at the child's rate, which is often lower than the parent's rate.
You can open a Trump Account for a child of any age, from birth onward. You will need to be the parent, legal guardian, or authorized custodian. Some banks allow grandparents or other relatives to open accounts, but policies vary by institution.
The main purpose of a Trump Account is to help you save money for the child's future—whether for education, a first car, or other goals. The account is separate from your own finances, so the money cannot be seized in a lawsuit against you, and it does not count as your asset on financial aid forms (though it does count as the child's asset).
Key Takeaways
- A Trump Account is a custodial savings account in the child's name, managed by you until they reach age 18 or 21.
- You will need the child's Social Security number, proof of your identity, and proof of your relationship to the child to open an account.
- Different banks offer different account types—savings accounts, investment accounts, or 529 education savings plans—so compare options before opening.
- Money deposited into a Trump Account belongs to the child and may affect their financial aid may be able to access, though it does not affect yours.
- Once the child reaches the age of majority, the account transfers to their control, and you no longer have authority over the funds.
Documents and Information You Will Need
Before you visit a bank or financial institution, gather the following items. You will need your own government-issued photo ID (driver's license, passport, or state ID card) and proof of your address (a recent utility bill, lease, or mortgage statement). You will also need the child's Social Security number and birth certificate or other proof of the child's identity and age.
Some banks ask for proof of your relationship to the child—a birth certificate showing you as the parent, an adoption decree, or a court order naming you as legal guardian. If you are not the biological parent, bring whichever document establishes your legal authority to act on the child's behalf.
Have the child's full legal name and date of birth written down. If the child has ever had a Social Security number changed or corrected, bring documentation of that as well, since the bank will verify the number against Social Security Administration records.
Where to Open a Trump Account
You can open a Trump Account at most banks, credit unions, and investment firms. National banks like Chase, Bank of America, and Wells Fargo all offer custodial accounts. Credit unions often have lower fees and may offer better interest rates on savings accounts. Online banks like Ally, Marcus, and Discover also offer custodial accounts, sometimes with higher yields on savings.
If you want to invest the money rather than keep it in a savings account, brokerages like Fidelity, Vanguard, and Charles Schwab offer custodial investment accounts (sometimes called Uniform Gifts to Minors Act accounts, or UGMA accounts). These allow you to buy stocks, bonds, mutual funds, or exchange-traded funds on behalf of the child.
Call ahead or check the bank's website to confirm they offer custodial accounts and to ask about minimum deposits, monthly fees, and interest rates. Some banks waive fees if you maintain a minimum balance or set up direct deposit. Comparing three to five institutions before opening an account can save you money over time.
The Steps to Open an Account
Visit the bank in person or open the account online, depending on the institution's policy. In person, bring all the documents listed above. The bank will verify your identity and the child's identity, run a background check (standard for all account holders), and confirm the child's Social Security number with the Social Security Administration.
You will fill out a custodial account agreement, which states that you are opening the account on behalf of the child and that the money belongs to the child. The bank will explain the account type, fees, interest rate or investment options, and the age at which the account will transfer to the child's control. Read this agreement carefully—it is a legal document that binds you.
Once the account is open, you will receive a debit card (if it is a checking or savings account), online access, and account statements. You can deposit money immediately, either in person, by check, by electronic transfer, or by setting up automatic deposits from your paycheck or bank account.
Tax Reporting and Financial Aid Impact
Interest or investment earnings in a Trump Account are reported to the IRS on a Form 1099-INT (for interest) or Form 1099-DIV (for dividends). The earnings are taxed at the child's tax rate, which is usually lower than yours. However, if the child is under 18 and the earnings exceed a certain threshold (this amount changes yearly), the excess is taxed at the parent's rate under the "kiddie tax" rule. Ask the bank or a tax professional what the current threshold is.
When the child applies for federal financial aid for college (using the FAFSA form), money in a custodial account counts as the child's asset, not yours. This can reduce the amount of aid the child receives, because the formula assumes the child will contribute a percentage of their assets to education costs. However, the account does not count as your asset, so it does not reduce your aid may be able to access if you are also a student.
Keep records of all deposits and withdrawals. The bank will send you statements, but it is your responsibility to report the account correctly on tax forms and financial aid applications.
What Happens When the Child Turns 18 or 21
When the child reaches the age of majority (18 in most states, 21 in a few), the custodial account automatically converts to an account in the child's name alone. You no longer have authority over the account or the money. The child can withdraw all the funds, close the account, or continue using it as their own savings or investment account.
Some parents discuss this transition with their child beforehand, explaining the purpose of the account and encouraging the child to use the money for education, a down payment on a home, or other long-term goals. However, once the account is in the child's name, you have no legal say in how the money is spent.
If you are concerned about the child spending the money unwisely, you can discuss alternatives with a lawyer or financial advisor—such as setting up a trust instead of a custodial account. A trust gives you more control over when and how the money is distributed, even after the child reaches adulthood. However, trusts are more expensive to set up and maintain than custodial accounts.
Fees, Interest Rates, and Account Types to Compare
Custodial savings accounts at traditional banks typically charge a monthly maintenance fee (ranging from $0 to $15 per month) and offer interest rates between 0.01% and 0.5% annually, depending on the bank and current market conditions. Online banks often have no monthly fees and offer higher interest rates (sometimes 4% to 5% or higher on savings accounts). Investment accounts at brokerages may charge annual fees (often 0.1% to 1% of the account balance) but do not charge monthly maintenance fees.
If you plan to deposit small amounts regularly, a no-fee online savings account may be your best choice. If you plan to invest the money and leave it untouched for years, a brokerage custodial account may offer better long-term growth, though you will pay investment fees. Compare at least three options side by side: write down the monthly fee, annual percentage yield (APY) or expected return, minimum deposit, and any other charges.
Frequently Asked Questions
Can I withdraw money from my child's Trump Account whenever I want?
Yes, as the custodian, you can withdraw money from the account at any time. However, the money must be used for the child's benefit—for example, to pay for food, housing, education, or medical care. Withdrawing money for your own personal use is technically a misuse of the account, though it is rarely prosecuted. Once the child reaches age 18 or 21, the account is theirs, and you cannot withdraw money without their permission.
What is the difference between a Trump Account and a 529 plan?
A Trump Account (custodial account) can hold any type of savings or investment and can be used for any purpose. A 529 plan is a tax-advantaged education savings account—money grows tax-free if used for college or other may have access to education expenses. If you withdraw money from a 529 for non-education purposes, you pay income tax plus a 10% penalty on the earnings. Choose a 529 if education savings is your main goal; choose a Trump Account if you want flexibility.
Does opening a Trump Account for my child affect my credit score?
No. A custodial account is in the child's name, not yours, so it does not appear on your credit report and does not affect your credit score. The bank will run a background check on you as the account holder, but this is a soft inquiry and does not lower your score.
Can I name someone else as custodian if something happens to me?
Most custodial accounts allow you to name a successor custodian—usually a spouse, parent, or trusted friend—who will take over the account if you die or become incapacitated. Ask the bank about this option when you open the account. You may need to fill out a form naming the successor custodian, or you may be able to update this information online.
What if I want to close the account before the child turns 18?
You can close a custodial account at any time. The bank will send you the balance as a check or electronic transfer. However, closing the account does not change the tax status of any earnings that have already been reported—you will still owe taxes on those earnings. If you close the account and then reopen it later, it will be treated as a new account with a new opening date.