Would you consider having a baby for an extra $1,000 deposited into a tax-advantaged account? Do you think your adult children might? One-in-three Americans said that the promise of $1,000 for their child at birth would incentivize them to expand their family, according to a new survey from BadCredit.org.
As of July 4, 2026, the nation’s 250th birthday, American children born between January 1, 2025, and December 31, 2028, with a valid social security number will receive $1,000 deposited into a 530A, an investment account widely known as a Trump Account. The accounts are solely in the child’s name; parents remain as custodians until the child turns 18.
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Parents aren’t required to make any deposits but can add up to $5,000 per year, an amount that will be indexed for inflation after 2027. Employers can also match funds up to the total contribution limit. Surprisingly, 37% of Americans said they wouldn’t open a Trump Account for their newborn.
“I’m wondering if a good portion of that 37% who said they aren’t interested just aren’t aware that this isn’t a gift. This isn’t money you have to pay back,” said BadCredit.org money expert Erica Sandberg. “It’s really important to get this message out. The more people know about it, the better. This is free money.”
Can a Government Incentivize People to Have Children?
Trump Accounts were launched as part of the One Big Beautiful Bill to incentivize Americans to have more children by creating a sense of financial security and a “head start on the American dream,” according to TrumpAccounts.gov.
Sandberg acknowledged that a $1,000 investment account can have a solid psychological effect, especially since the account is easy to open and requires no initial investment from the parents or anyone else.
“There’s a certain amount of optimism that comes along with an investment account. There’s a sense of positivity about it that can be really encouraging,” she said.
However, she said she doubts it will change many people’s minds about having children if they weren’t already planning to.
“It is really hard to get someone to have more children or have a child. It’s virtually impossible. We’ve seen this across the globe; I don’t care where you are, if the population of your country is retracting, changing the overall attitude of having a baby is extremely difficult,” she said. “Kids are expensive, especially in America. This is going to be a drop in the bucket when it comes to the expenses that are involved in having a child.”
The survey results supported Sandberg’s stance. Amongst people with no children, less than one-quarter (23%) said a Trump Account would incentivize them to have a baby. Meanwhile, 47% of people with at least one child under 12, and 44% of people with at least one child ages 13 to 17, said a Trump Account would be an incentive to have another.
Those with at least one child 12 or under and at least one child ages 13 to 17 were most likely (51%) to say a Trump Account would incentivize them to have another baby. Overall, most Americans (63%) said they’d accept an account, but 68% said it wouldn’t change their plans to expand their family or not.
How to Open a Trump Account
Opening a Trump Account is easy for authorized individuals. Simply sign into your IRS account through ID.me or create one. Complete and submit form 4547. You’ll need the child’s social security number, date of birth, and legal address, according to the IRS website.
“It’s an investment account that’s already started for you,” Sandberg said. “That sort of frictionless investment experience is very positive. The easier it is, the better it is.”
While parents of newborns through 2028 receive $1,000 in seed money into the 530A, parents with children under the age of 18 can open an account. If a parent or legal guardian is not available to make the election, an adult sibling or grandparent may do so, according to IRS.gov.
With these guidelines in mind, grandparents may not be able to directly open an account for a grandchild. But they can inform the parents of the benefits and even provide seed money or make deposits into the account as gifts to the child. Contributions made with after-tax dollars won’t be taxable upon withdrawal. It’s smart to speak to your tax accountant to determine if this is the best way to share generational wealth.
Unlike an IRA or Roth IRA, the child doesn’t need earned income to fund the account. At age 18, the account may be converted into an IRA, a Roth IRA, a workplace retirement plan, or kept as a Trump Account, largely following IRA withdrawal rules. The IRS will be issuing more guidance on options for 530A accounts in the future.
Once the accountholder turns 18, they may be able to withdraw funds without penalties for certain expenses, including up to $10,000 for first-time homebuyers, certain education expenses, birth or adoption costs, qualifying medical expenses, disability, or a terminal illness.
How Much Can a Trump Account Earn?
If parents of newborns let the account sit without additional contributions beyond the initial $1,000, the child could have $6,000 by the time they turn 18.
Families who can contribute to the account can give the recipient an even bigger advantage. With $250 per year in contributions starting at birth, the account could grow to $19,000 by age 18. With the maximum allowable contribution of $5,000 per year, the account could grow to $271,000 by the time the account holder is 18. These yields are based on historical S&P averages. During the growth period until the child reaches age 18, assets are held in mutual funds or ETFs tracking an index of companies with expense ratios below 0.10%. As with any investment, results may vary.
“It’s a solid chunk of cash,” Sandberg said. “I think it’s an attractive account overall.”