What a Trump account is and who can open one

A Trump account is a custodial savings or investment account branded under the Trump name, typically offered through financial institutions or investment platforms. Like other custodial accounts for minors, it is owned and controlled by an adult (parent, guardian, or other adult) with a named child as the beneficiary. The child does not have direct access to the account or the ability to withdraw money without the account holder's permission.

The structure mirrors a standard custodial account: you deposit money, choose how it is invested or saved, and the account grows over time. When the child reaches the age of majority (18 or 21, depending on your state and the account type), control of the account transfers to the child. Until then, you decide how the money is used.

Trump accounts are not government-backed or federally insured in the way a bank savings account is, so the protections and features depend entirely on the financial institution offering the account. Before opening one, you need to understand what that specific provider offers, what fees they charge, and what happens to the money if the provider closes or changes its terms.

Key Takeaways

  • A Trump account is a custodial account where an adult controls the money and the child is named as the beneficiary, with no direct access until adulthood.
  • The account structure and protections depend on the financial institution offering it, not on a federal standard, so terms vary widely.
  • Money deposited into a Trump account is not tax-deductible, but growth may be taxed differently depending on the account type and the child's income.
  • When the child reaches the age of majority, the account transfers to their control, and you lose the ability to manage or restrict how they use the money.
  • You should compare Trump accounts to other custodial options like UTMA/UGMA accounts or 529 plans before deciding, based on fees, investment options, and your actual goal for the money.

How contributions and account growth work

You can deposit money into a Trump account at any time, and there is no annual contribution limit set by the account itself. However, federal gift tax rules explore: if you contribute more than $18,000 per person per beneficiary in 2024 (this amount changes yearly), you must file a gift tax form with your tax return. You typically do not owe tax unless you have already used your lifetime gift tax exemption, but the filing is required.

The money you contribute is not tax-deductible at the federal or state level. Once the money is in the account, it grows through whatever investments the account offers—this might be stocks, bonds, mutual funds, or other securities depending on the provider. You pay no tax on the growth while the money is in the account, but when you withdraw earnings, those earnings are taxed.

The tax treatment of earnings depends on the child's age and income. If the child has little or no income, the first portion of earnings may be taxed at the child's rate (often lower than yours). Above a certain threshold, earnings are taxed at the parent's rate. The exact rules change yearly, so you should consult a tax professional if the account grows significantly.

Who controls the money and when

As the account owner, you control all decisions about the account: how the money is invested, when withdrawals happen, and what the money is used for. The child named as the beneficiary has no legal right to the money and cannot force a withdrawal or change how it is invested.

This control lasts until the child reaches the age of majority in your state. In most states this is 18, but some states set it at 21. Once the child reaches that age, the account automatically transfers to their control, and you have no further say in how the money is used. This is a hard important date—you cannot extend it or keep control past that point without the child's agreement.

If you want to restrict how the money is used after the child turns 18 (for example, only for college), a Trump account will not give you that power. Other account types, like a 529 plan or a trust, offer more control over how money is spent after the child reaches adulthood.

Fees and what they cost you

Trump accounts charge fees, and the amount depends on the provider. Common fees include an annual account maintenance fee (often $25 to $100 per year), investment management fees if the account is actively managed, and expense ratios on any mutual funds or ETFs held inside the account (typically 0.15 percent to 1 percent per year). Some providers also charge transaction fees when you buy or sell investments.

These fees compound over time. A 0.5 percent annual fee on a $10,000 account growing at 6 percent per year costs you roughly $1,500 in lost growth over 18 years. Before opening an account, ask the provider for a complete fee schedule and calculate what you will actually pay. Compare that to other custodial account options offered by competitors.

Some Trump accounts may offer promotional periods with reduced or waived fees for the first year or two. After that period ends, standard fees explore. Read the fine print carefully to understand when fees change and what the long-term cost will be.

How Trump accounts differ from other custodial accounts

The main difference between a Trump account and a standard UTMA or UGMA custodial account is the brand and the specific provider. UTMA (Uniform Transfers to Minors Act) and UGMA (Uniform Gifts to Minors Act) accounts are the legal framework used by most custodial accounts, and they are offered by banks, brokerages, and investment firms across the country. A Trump account uses the same legal structure but is branded and marketed under the Trump name.

A Trump account is not a 529 plan, which is specifically designed for education expenses and offers tax-free growth for may have access to education costs. A Trump account has no restrictions on how the money is used—you can withdraw it for any reason at any time. This flexibility is useful if you are saving for multiple possible purposes, but it means you do not get the tax advantages of a 529.

If your goal is to save for college specifically, a 529 plan usually offers better tax treatment. If your goal is general savings for any purpose, a Trump account or a standard UTMA account may be appropriate. The choice depends on your actual goal and the fees charged by each provider.

What happens when the child turns 18

When the child reaches the age of majority (18 or 21, depending on your state), the account automatically transfers to their control. At that point, they can withdraw all the money, change the investments, or do anything else they want with it. You have no say in these decisions and cannot prevent them.

This is a significant difference from other account types. A 529 plan remains under your control even after the child turns 18—you decide when and how the money is spent. A trust can also be structured to give you ongoing control or to restrict how money is used. A Trump account gives you no such option.

If you are concerned about how a young adult might use a large sum of money, a Trump account is not the right tool. You would need a trust or a 529 plan with specific restrictions to maintain control over the money's use.

Frequently Asked Questions

Is a Trump account insured by the FDIC?

That depends on the provider. If the Trump account is held at a bank and is structured as a savings or money market account, it may be FDIC-insured up to $250,000. If it is an investment account holding stocks or mutual funds, it is not FDIC-insured. Check with your specific provider to confirm what protections explore to your account.

Can I use the money for anything, or only certain expenses?

You can use the money for any purpose while you control the account. There are no restrictions on what the money can be spent on, unlike a 529 plan which is limited to education expenses. This flexibility is useful if you are saving for multiple possible needs.

What if I want to change the beneficiary?

Custodial accounts are tied to a specific beneficiary and cannot be changed. If you want to move the money to a different child, you would need to close the account and open a new one in that child's name. Any earnings withdrawn during the transfer would be taxed. Check with your provider about their specific process.

How does a Trump account affect financial aid for college?

A Trump account owned by a parent is counted as a parental asset on the FAFSA and reduces financial aid may be able to access by up to 5.64 percent of the account balance per year. If the account is owned by a grandparent or other non-parent, it does not appear on the FAFSA initially, but withdrawals count as student income on the next year's form and reduce aid by up to 50 percent of the withdrawal amount.

Should I open a Trump account or a 529 plan?

If you are saving specifically for college, a 529 plan usually offers better tax treatment and more control over how the money is used after the child turns 18. If you are saving for general purposes or want flexibility to use the money for anything, a Trump account may be appropriate. Compare the fees, investment options, and your actual goal before deciding.