Can “Trump Accounts” Help Middle-Class Families Save for Their Kids?

Imagine your child turning 18 and having a few thousand dollars waiting for them — not because you hit the lottery, but because you had a plan from the very beginning. For many middle-class families, this kind of head start can mean the difference between building wealth and falling behind.

Now imagine that this plan didn’t start with you — but with the government.

That’s the idea behind a new federal initiative that’s generating buzz. The proposal would give every newborn in the U.S. $1,000 in a long-term investment account, often referred to as a “Trump Account,” “MAGA Account,” or simply a government savings account. The goal is to help more families build wealth from day one — regardless of zip code, race, or income bracket.

If you’re a middle-class parent trying to make smart money moves for your kids, this is a conversation worth tuning into.

What Are “Trump Accounts”?

The concept is simple: starting in infancy, each American child would have $1,000 deposited into an investment account that they could access when they reach adulthood. The proposal is designed to promote economic opportunity and close the generational wealth gap.

These would work similarly to a custodial investment account or a 529 college savings plan, with the federal government providing the initial contribution and families potentially being allowed to contribute additional funds over time.

📚 Want to learn more about custodial investment accounts? Check out NerdWallet’s guide to UGMA and UTMA accounts.

How Would These Accounts Work?

Although the proposal hasn’t been fully legislated yet, here’s how these accounts are expected to operate based on available details and comparisons to similar programs:

1. $1,000 is deposited at birth for every U.S. citizen child.

2. The account is invested, rather than sitting idle — likely in a broad stock index—with options for parents to contribute up to $5,000 per year.

3. Compound interest helps the money grow over 18 years.

4. Funds are restricted until adulthood and may be used for approved life milestones like higher education, homeownership, or entrepreneurship.

In theory, if left untouched, that initial $1,000 could grow significantly over 18 years. For instance, assuming a conservative annual return of 7%, the account could grow to nearly $3,400 by the time the child turns 18 — this is not including any contributions parents make.

📈 Use the SEC’s compound interest calculator to project how savings can grow over time.

Why Middle-Class Families Should Pay Attention

For wealthier families, this kind of policy may seem symbolic — helpful, but not life-changing. But for middle-income households, a $1,000 head start (and the potential to grow it) can make a real difference.

Here’s why:

1. It Eases the Pressure to Save Alone

Many parents want to save for their children’s future but are juggling rising housing costs, inflation, and student loan payments. These accounts don’t replace your effort — they support it.

2. It Builds Financial Confidence

Research shows that when children know they have money set aside for their future, it influences their mindset and behavior. According to a study from the Center for Social Development at Washington University, children with savings accounts in their name are four times more likely to enroll in college and three times more likely to graduate than those without.

📚 Read the full study from the Center for Social Development.

3. It Offers Flexibility Beyond College

Unlike traditional 529 plans, these proposed accounts may be designed to support more than just college — potentially covering trade school, business startups, or a down payment on a first home. That opens doors for a broader range of life goals, especially for families whose children may not follow a traditional path.

Can Families Contribute More?

Although details may change as legislation develops, it’s expected that families will be allowed — or even encouraged — to contribute their own money to the account.

This is where platforms like Mostt come in. Mostt allows parents to open investment accounts for their children, and automate contributions.

Here’s what that could look like:

• $25/month over 18 years = $5,400 in total contributions

• Assuming a 7% annual return = over $9,000 by the time your child turns 18

Add that to the original $1,000 government deposit, and your child could graduate high school with over $12,000 — without needing to save massive chunks of money all at once.

📚 Check out this article from CNBC on how custodial investment accounts work for minors.

What Are the Limitations?

While the proposed plan sounds promising, there are still open questions that need to be addressed:

• Who will manage the accounts? Will they be run by government agencies or private investment firms?

• What kind of investments will be available? Will families have choices, or will investments be limited to preset portfolios?

• Will funds be restricted? Will the money be locked until age 18, or will there be penalties for early withdrawals?

• How will eligibility be determined? Will the accounts be available to all citizens equally?

What Can Families Do Now?

Regardless of whether Trump Accounts become a reality, there are immediate steps you can take to begin building your child’s financial future.

1. Open an Investment Account Today

You don’t have to wait for Washington. With platforms like Mostt, Fidelity, or Vanguard, you can open investment accounts and begin investing for your child immediately.

2. Automate Contributions

Consistency is key. Even small monthly investments can grow over time through compound interest. Automating your deposits ensures you don’t forget and builds momentum without adding mental load.

3. Teach Your Kids About Money Early

Research shows that kids form financial habits as early as age 7. Talk to your child about how their money is growing. Show them their account. Make it something they’re proud of — not confused by.

📚 Read this article from the Consumer Financial Protection Bureau on how to talk to kids about money by age group.

Final Thoughts: Whether or Not “Trump Accounts” Pass, Your Child Deserves a Head Start

There’s no question the idea behind government-funded child investment accounts has power — especially for middle-class families who are eager to build something better but feel stuck in survival mode.

If passed, Maga accounts could provide a solid foundation — one you can build on over the next 18 years. But you don’t have to wait for Congress to act.

The best time to start was yesterday. The second-best time is today.

How Trump Accounts Could Help You Save

Start building your child’s future today with Mostt’s easy-to-use investment platform. Open an account now and take the first step toward a smarter future.