Tech CEO Michael Dell and his wife Susan on Tuesday pledged $6.25 billion to the so-called Trump Account, a type of tax-advantaged savings account for children.
This initiative will expand access to seed money for eligible children who are too old to qualify for the upcoming $1,000 grant from the Treasury Department.
With the additional funding, about 25 million American children under the age of 10 born before Jan. 1, 2025, will each receive a $250 grant in Trump’s account, according to Invest America, a nonprofit advocacy group affiliated with the Dells.
“It’s designed to help families feel supported from the start and encourage them to continue saving as their children grow,” said Michael Dell, founder and CEO. Dell Technologieshe told CNBC.
To be eligible for Dell’s $250 donation, children must live in a zip code with a median income of $150,000 or less.
The $6.25 billion donation was made on Giving Tuesday, historically an important day for charitable giving in the United States.
About 36.1 million U.S. adults participated in Giving Tuesday last year, and total donations totaled $3.6 billion, up from $3.1 billion the year before, according to estimates from the Giving Tuesday Data Commons.
How Trump Account Works
Under President Donald Trump’s “Big and Beautiful Act,” which Congress passed in July, anyone would be able to open a Trump account on behalf of a child under 18. Each baby born between 2025 and 2028 will receive a one-time credit of $1,000 into their account. There are no income requirements and anyone is eligible to receive government seed money as long as their child is a U.S. citizen.
The grants will benefit millions of young Americans: By comparison, there will be about 3.6 million births in the U.S. in 2024, an increase of about 1% from 2023, according to preliminary data released in April by the Centers for Disease Control and Prevention’s National Center for Health Statistics.
Like 529 college savings plans, Trump accounts are intended to encourage early savings opportunities and can receive annual contributions from employers as well as contributions from state and local governments and nonprofit organizations.
Mr. Dell previously pledged to provide government seed money to the children of his employees “dollar for dollar” during the Investing in America roundtable with President Trump at the White House in June. Other CEOs at the event also pledged to contribute to the savings account plan on behalf of their employees.
Mr. Trump’s account balance will be invested in low-cost index funds such as mutual funds and exchange-traded funds. However, the asset management industry has expressed concerns about language in the bill that could limit ETF and mutual fund options in these accounts. They asked the Treasury Department to expand its interpretation.
Mr. Trump’s account will initially be created and managed through a Treasury Department “designated financial agent,” according to details released by the Treasury Department on Tuesday. Parents or guardians can then transfer the entire balance to their brokerage firm, according to the Ministry of Finance.
“We’re creating a private prosperity account for every child,” Brad Gerstner, CEO of Altimeter Capital, which is spearheading the effort, said on “Squawk Box” Tuesday morning.
How to claim the grant
Trump’s account is still unavailable. But starting July 4, 2026, parents and others will be able to contribute up to $5,000 a year after taxes until the year before the beneficiary turns 18.
“We’re automatically creating these accounts for every child at birth,” President Trump said Tuesday. “We’re going to be very focused on making sure every family that’s eligible to get one of these accounts can claim it and get it.”
A draft IRS form released Tuesday and the White House website instructs family members to vote through Form 4547, open an account for Trump, and receive a $1,000 donation. The IRS says that by mid-2026, people will also be able to vote through Trumpaccounts.gov.
Withdrawals are not allowed until the beneficiary turns 18 years of age. At that point, the assets are transferred to an individual retirement account. Beneficiaries can use the funds for educational expenses, job training, a down payment on their first home, or capital to start a small business. You can also choose to keep the invested funds for your retirement.
From a tax perspective, Trump’s account would function like an IRA. Profits grow tax-deferred, and distributions are partially taxed because Trump’s account is a mix of after-tax contributions, initial seed money and investment income.
The Treasury Department and the IRS released additional information about the Trump account Tuesday afternoon, including how it works and other details. But questions about the program still remain. The Treasury Department and IRS guidance did not include details about the Dell family’s claim or eligibility for the grant.
Impact on low-income households
Experts say the one-time $250 deposit into Trump accounts won’t have a big impact on low-income households.
“We need to see more of this kind of giving to generate meaningful amounts,” says Ben Henry Moreland, a certified financial planner at advisor platform Kitces.com.
Additionally, much depends on public education, he says.
The federal government “needs to sell these (accounts) to people who wouldn’t necessarily donate themselves,” he said. “This is going to require some organized and coordinated effort.”
Additionally, whether the Treasury Department automatically opens accounts for all eligible participants could go a long way in determining how many children, especially from low-income families, enroll and benefit from the subsidies, according to a July analysis by the Aspen Institute, a nonprofit forum.
“We strongly recommend that the Treasury Department prioritize enabling automatic enrollment in the implementation of the Trump Account program, as success for young people from low- to moderate-income households is highly dependent on this specific choice,” the researchers wrote.
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