The US government has introduced a new federal investment programme for newborns, with the White House confirming that more than 500,000 families have already enrolled. Announced by President Donald Trump, the initiative aims to help children build long-term savings while addressing affordability pressures faced by American families.
The programme establishes federally supported investment accounts for babies born over a three-year window. Each eligible account includes an initial contribution from the government. The rollout comes as the Trump administration and the Republican Party seek to address rising cost-of-living concerns ahead of the November midterm elections, according to a Reuters report.
The accounts were created last year under the One Big Beautiful Bill Act, the administration’s flagship tax and spending legislation. Under the scheme, the US Treasury will deposit $1,000 into an investment account for every child born between 2025 and 2028. Officials estimate that approximately 25 million families could qualify for the benefit.
In addition to the government contribution, families are encouraged to make voluntary deposits into the accounts. Private sector support has also emerged, with entrepreneur Michael Dell and his wife, Susan, committing a combined $6.25 billion to the programme.
At a White House event in Washington marking the launch, officials said the initiative was designed to close savings gaps among American households. Estimates presented at the event suggested that if families contribute the maximum allowed amount of $5,000 annually, the account could grow to nearly $1.1 million by the time the beneficiary reaches the age of 28.
The administration has positioned the programme as bipartisan in nature rather than politically driven. Speakers at the launch emphasized that the initiative aims to benefit families across the political spectrum.
Despite the launch, awareness of the programme remains relatively low. A survey conducted by Exclusive Public First found that more than half of Americans had not heard of the accounts. An additional quarter reported some awareness but lacked understanding of how the programme operates, according to reporting by Politico. Only a small share of respondents said they were familiar with the accounts and understood their purpose.
Understanding the Newborn Investment Accounts
The accounts are federally backed investment vehicles designed to help US children build savings from birth through long-term investing. Each eligible child receives a one-time government deposit of $1,000 into an account opened in their name, with parents or guardians serving as custodians until the child turns 18.
Funds in the accounts must be invested in low-cost index funds that largely track US companies. The money remains locked in until adulthood, after which the account converts into an individual retirement account. Families, employers, and other contributors may add up to $5,000 per year, while employer contributions of up to $2,500 are excluded from taxable income.
Withdrawals are governed by standard IRA rules, with limited exceptions for specific uses such as education expenses, purchasing a first home, or starting a business. According to the administration, the programme is intended to combine public funding, private investment, and household savings to strengthen long-term financial security for future generations.
