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Key Takeaways
- The Treasury Department auto-enrolled 70 million children into Trump Accounts on Oct. 1.
- Millions of those children will automatically qualify for a $250 deposit from the founder and CEO of Dell Technologies.
- About seven in 10 children will qualify for the money.
The Treasury Department opened Trump Accounts for 70 million children this month.
Win McNamee / Getty Images
Millions of parents who never signed their kids up for a Trump Account may now have money in one anyway.
About 70 million children were automatically enrolled in Trump Accounts this month, the White House said Wednesday.12 Children under 18 with a Social Security number had the new type of investment account opened for them without any action needed from their parents. And philanthropic deposits are on their way for some.
Deposits of $250 from Michael Dell, founder and CEO of Dell Technologies (DELL), and his wife, Susan, are landing in qualifying children’s Trump Accounts this week. Parents don’t need to take any action to claim that money, according to the Treasury Department.2
About 71% of children under 10 live in a ZIP code that meets the income test for a $250 deposit, according to an Investopedia analysis of Census Bureau data.3
Children born between 2016 and 2024 qualify if they live in a ZIP code with a median family income of $118,000 or less.45 Children on military bases qualify regardless of ZIP code.
That income threshold is lower than the one the Dells first announced. When they announced their pledge in December, the Dells pledged to donate $6.25 billion, going to children who live in ZIP codes with a median family income of $150,000.
About 3,500 ZIP codes that qualified under the higher threshold no longer do. They are home to more than 6 million children under 10.
The $250 won’t sit as cash. Money in an unclaimed Trump Account is invested in a single S&P 500 index fund until a parent claims the account and chooses otherwise.6 A child whose parents never hear about the program could claim the account at age 18 and find that the $250 has been compounding since it was deposited.
If the index matches its long-run average of about 10% a year, the deposit for a 1-year-old would grow to about $1,260 by age 18. That’s before fees and inflation, and S&P 500 returns aren’t guaranteed.
Until a parent or guardian claims the account, no one can view its balance or history, and the family can’t add money. To claim an account, you’ll need to verify your identity and your relationship to the child in the Trump Accounts app or web portal.7 For separated parents, whoever claims the account first gets control.
Invest America, the nonprofit managing the contributions, said the funds will be in accounts by Friday.8
Michael Dell said at the White House on Wednesday that the money had already been deposited into 10 million accounts.
The money from the Dells is separate from the seed money pledged by the government. Parents will need to file a form to claim the $1,000 seed deposit from the government if their child was born from 2025 through 2028. Both the government money and the deposit from the Dells go automatically into an S&P 500 index fund.9
This Investopedia article was legally licensed by AdvisorStream.