Trump Accounts, the new tax advantaged savings accounts for children, officially launch on July 4, and the Treasury Department has now spelled out exactly where the money will go. Every dollar deposited will start out in a single fund unless a parent later chooses otherwise.
At a Glance
- Trump Accounts, also called 530A accounts, launch July 4 for children born from 2025 through 2028
- All contributions default into the State Street SPDR Portfolio S&P 500 ETF (SPYM)
- SPYM carries a 2 basis point expense ratio, the lowest cost S&P 500 fund available
- Babies get a one time $1,000 Treasury deposit; others can add up to $5,000 a year
- Parents will eventually be able to pick among other approved low cost index funds
Why the Treasury Picked SPYM
The Treasury Department settled on the State Street SPDR Portfolio S&P 500 ETF as the automatic choice because it tracks the broad S&P 500 index at a rock bottom price. Its expense ratio sits at just 2 basis points, meaning an investor pays 20 cents a year for every $1,000 invested. Officials said cost to the public was the deciding factor, not brand recognition or asset size.
Until parents get the ability to redirect contributions, every dollar going into a Trump Account, whether from the government, a parent, an employer, or a family friend, lands in SPYM by default.
Other Funds Waiting in the Wings
The Treasury has also cleared a handful of other index funds for future use once account holders gain more control over allocation. These include the iShares Core S&P 500 ETF (IVV), the Vanguard Total Stock Market ETF (VTI), the State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and the iShares Core S&P Total US Stock Market ETF. All were chosen for keeping costs minimal while still giving broad market exposure.
| Fund | Ticker | Index Tracked | Role in Trump Accounts |
|---|---|---|---|
| SPDR Portfolio S&P 500 ETF | SPYM | S&P 500 | Default fund at launch |
| iShares Core S&P 500 ETF | IVV | S&P 500 | Approved alternative |
| Vanguard Total Stock Market ETF | VTI | Total US market | Approved alternative |
| SPDR Portfolio S&P 1500 Composite Stock Market ETF | SPTM | S&P 1500 | Approved alternative |
| iShares Core S&P Total US Stock Market ETF | BITO39 | Total US market | Approved alternative |
How Money Gets In
Every baby born between 2025 and 2028, spanning President Trump's second term, receives a one time $1,000 deposit from the Treasury automatically. Beyond that seed money, parents, relatives, friends, and even employers can chip in up to $2,500 a year starting July 5, with total annual contributions capped at $5,000. Treasury Secretary Scott Bessent said on Fox that the accounts will stick to low cost index funds so that, in his words, everyone can participate in the American Dream.
Contributions from parents will flow through a dedicated app rather than requiring any IRS paperwork, a detail meant to keep the process simple for families juggling other financial obligations.
Corporate and State Involvement
More than 50 companies have already pledged to contribute to their employees' Trump Accounts, a list that includes Bank of America, JPMorgan, Intel, and Uber. Individual philanthropists have made their own commitments too. Bessent said as many as 20 states could join in as part of what the administration calls its 50 State Challenge, an effort to get state governments to help fund the accounts alongside private employers.
What Comes Next for Families
The Treasury has said parents will eventually be able to choose how their child's account is allocated across the approved fund lineup, rather than being locked into SPYM. No firm timeline has been given for when that flexibility arrives, so for now the default fund will hold the bulk of early contributions. Families interested in participating should watch for the official app's rollout and confirm with employers whether a matching contribution is on the table.
A New Entry Point for Young Investors
The rollout gives millions of children a stake in the stock market before they can even open their own brokerage account, and it does so through some of the cheapest index funds on the market. Whether the program grows into a lasting fixture of family finance will depend on how many employers, states, and parents actually show up with contributions once the accounts go live.