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Video guide

My NEW Favorite Account to Gift Money to Kids and Grandkids!

New child investment accounts can sound exciting, but they should be compared with 529 plans, custodial accounts, Roth IRAs for earned income, and the family's actual goals.

Short answer

What This Video Answers

A Trump account, also called a 530A account in some planning conversations, may become a useful child investment account for some families. It should still be compared against 529 plans, UTMA or UGMA custodial accounts, Roth IRAs for children with earned income, and direct gifting strategies before money is contributed.

Key takeaways

What to Remember

  • The account is new enough that families should confirm current IRS and Treasury guidance before acting.
  • The right gifting account depends on whether the goal is education, retirement, flexibility, or family wealth transfer.
  • A new account does not automatically replace 529 plans, custodial accounts, or Roth IRAs for eligible children.
  • Grandparent and parent gifting should be coordinated with taxes, control, financial aid, and long-term family goals.

Written guide

How to Think About This Decision

Do not pick a child account from the headline alone

A new account can attract attention, but the planning question is still the same: what is the money for, who controls it, when can it be used, and how will it be taxed?

Compare it with the accounts families already know

Parents and grandparents may also consider 529 plans, UTMA or UGMA custodial accounts, Roth IRAs for children with earned income, brokerage accounts, and direct gifts. Each has different tradeoffs.

Coordinate gifting with the family plan

The best gifting account depends on family goals, cash flow, education planning, estate planning, and taxes. Flames FP helps families think through the account choice before a contribution becomes a long-term commitment.

Check the current rules before contributing

As of July 2026, the official Trump Accounts site describes tax-advantaged investment accounts for U.S. citizens under 18, including a $1,000 Treasury contribution for children born between January 1, 2025 and December 31, 2028, and private contributions up to $5,000 per year. Because this account type is new, families should confirm current IRS, Treasury, and account-provider guidance before choosing it over a 529 plan, custodial account, Roth IRA for earned income, or another family gifting strategy.

Related resources

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Use the related Flames FP page for the broader planning context behind this video.

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Title: My NEW Favorite Account to Gift Money to Kids and Grandkids!

My new favorite account to gift money to kids and grandkids

"The Minor Traditional IRA"

Aka, "The new Trump Investment Account"

Coming Soon: July 4th 2026

Okay so check this out, the new Trump Investment Account is about to come out and there's something you HAVE to know about it. This just became my favorite account for gifting to kids and grandkids. This is a retirement account for kids, are you kidding me? Let's talk about what this account is, how it works, and if you should use it? At the end of the video, I'll tell you exactly how I'll be using this account for my three boys!

Okay so let's start with some basics. Any child under 18 who has a valid Social Security number is eligible for opening this new account. But kids born in 2025, 2026, 2027, or 2028 will most likely get an initial $1,000 contri bution from the government when the account is opened. So if your child is born before or after those years, they can still use the account, it just won't be started off with a free $1,000 from the government.

This new account type launches on July 4th, 2026 (that's pretty sick actually). Parents, or anyone can contribute to this account. Even corporations can contribute to your kids account. There's a maximum of $5,000 per year for now, but may start to increase with inflation in 2028. These ar

This is how I'll be thinking about the account. It's a retirement account. It could be used for some things like buying a home or starting a business, but I'm primarily thinking of this as a retirement account for my kids. The reason why this is so powerful is because we kind of had this option with the Minor Roth IRA, but it was so much more difficult to take advantage of. Until now, your minor child had to have earned income in order to contribute to a minor's retirement account. Not many people were able to fully take advantage of that until your child is much older.

And by the way, these are the types of conversations we are having with our clients every single day. Flames Financial Planning is a flat fee financial planning firm with different membership tiers. Our flagship clients receive a white glove, comprehensive experience with investment management, financial planning, tax filling, and estate planning all included. If you're looking for an expert who can stay up to date with the current and newest best practices, we'd love to meet you.

Another thing I'm a big fan of with this new account, is when you make contributions into the account, the money will be automatically invested in diversified low-cost index funds which are designed to maximize long-term growth while minimizing risk. So you won't have to worry about the money sitting in cash or unnecessary high cost funds.

Okay, so here's how I'll be using it in 2026 and going forward. I'm going to open an account for each of my boys and make an initial contribution. Then every year I'll review my cash flow, decide how much I'd like to contribute to their retirement account, and make the contribution. Then here's my favorite part. At age 18, I'll convert the entire account to a Roth IRA in their name. This means they'll be starting so far ahead of the average person who doesn't start typically start saving for their retirement until they have a real job after college.

Check out this example. If I put in $5,000 when they are born just ONCE and that grows for 60 years at 8%. The account will be worth about $21,000 at age 18 when I convert it to a Roth IRA. Then the entire account would be worth over $600,000 TAX FREE when they hit age 60.

What I love about this new account is that it's another option to save for kids and grandkids. It's not required or mandatory for success, but it gives us more flexibility than before and opens a door that wasn't previously available. If you want to gift money to an account to either your direct kids or grandkids, here's the order I'd think about it in.

First, decide how much you'd like to give this year

Second, decide what goal you'd like save for. Is there one major goal you'd like them to use the money on, like college, a house, or retirement for example

Third, then you can pick the best account type for the goal you decided on

I know that I'll be taking advantage of this cool new saving technique, but I'd love to hear what you think! Are you team "Minor Traditional IRA", team 529, team UTMA, or how about a combination of them all?! Let me know in the comments!

Make sure to hit that subscribe button for more financial education just like this, and I will see you next time!

FAQ

Common Questions

What is a Trump investment account for kids?

It is a newer child investment account concept tied to federal law and guidance. Families should confirm current IRS and Treasury rules before contributing.

Is this better than a 529 plan?

Not automatically. A 529 plan is still a strong education-planning account. The better choice depends on the goal for the money.

Can grandparents use this type of account?

Grandparents may be part of a gifting strategy, but contribution rules, control, taxes, and family goals should be reviewed first.

Can Flames FP help compare child gifting accounts?

Yes. Child gifting can be reviewed as part of family wealth planning, tax planning, estate planning coordination, and investment strategy.

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