The law’s primary goal is to revitalize the U.S. economy by boosting family savings and birth rates. Trump framed it as the cornerstone of his “America First 2.0” agenda, declaring that “investing in children is investing in America’s future,” reports Marca.
ALSO READ: $2000 direct deposit for US citizens in October? Check latest update on stimulus check, inflation check and more
The new child stimulus check
Among the bill’s most innovative features are the “Trump Accounts”—personal savings funds for every child born in the United States between 2025 and 2028. At birth, the federal government deposits $1,000 into an investment account managed by IRS-approved financial institutions.
These accounts function as a hybrid of a 529 college savings plan and a Roth IRA, allowing funds to grow in moderately risky index portfolios. Withdrawals remain tax-free when used for qualified expenses such as education, home purchase, or retirement, making them a long-term investment in the next generation.
ALSO READ: Amazon Layoffs: Thousands more jobs at risk as AI revolution reshapes the company’s workforce. Which department is the worst hit?
One of the most groundbreaking features of the OBBBA is the so-called “Trump Accounts,” a savings fund created for every child born in the United States between 2025 and 2028. At birth, the federal government automatically deposits $1,000 into an investment account managed by IRS-authorized financial institutions.
These accounts function as a hybrid between a 529 college savings plan and a Roth IRA, allowing funds to grow tax-free when used for qualified purposes such as education, buying a first home, or retirement.
Family Contributions and Tax Benefits
Parents or guardians can contribute up to $5,000 per year, with $3,000 eligible for tax deduction. By law, withdrawals for long-term goals can be made penalty-free once the child turns 18 or older. The program is set to run as a four-year pilot, with its continuation contingent on participation rates and economic impact. It applies to all children born on U.S. soil, regardless of their parents’ immigration status.
ALSO READ: Skims shock: Kim Kardashian’s underwear design with built-in faux pubic hair sparks massive outrage. But it’s not new
The key attraction of Trump Accounts is their growth potential. The Brookings Institution estimates that a family contributing an average of $2,000 per year could accumulate over $100,000 by the time the child reaches 18—enough to fund college tuition or a home down payment.
Even without additional contributions, the initial $1,000 deposit can grow substantially thanks to compound interest: if left untouched until age 67, it could reach roughly $13,800 at 4%, $26,000 at 5%, or as much as $93,000 at 7% annual return.
The OBBBA comes at a time when U.S. birth rates have dropped below 1.6 children per woman, and household debt exceeds $100,000. With this initiative, Trump aims to reverse these trends, positioning himself as the president who “paid parents to build the country’s future.”
ALSO READ: Protein powder safety alert: Alarming report says high level of lead found in shakes. Check details
How to claim the amount
The government pledges to create an account for any baby born between 2025 and 2028, and to fund it with a one-time deposit of $1,000. To qualify, the baby need only have a Social Security number.
Parents and others can contribute up to $5,000 per year to these accounts until the child turns 18. Employers may add up to $2,500 toward the $5,000 annual limit. State and local governments, as well as private charities, will also be permitted to make contributions.
ALSO READ: Politico bombshell: Full list of young Republican leaders caught sharing vile text messages on rape, slavery and Hitler
Contributions cannot begin until July 2026, and additional details are still being finalized. To open an account, parents will likely need to indicate on a tax form that they are new parents, according to Williams of the Retirement Clearinghouse. Under the new law, funds in Trump Accounts must be invested in low-cost stock index funds that track major indexes, such as the S&P 500.
as a Reliable and Trusted News Source