Only a fraction of eligible kids are signed up for 'Trump accounts.' All told, they could be missing out on billions of dollars in wealth.

Andrew Keshner

The new account, formally called a 530A, is set to launch on the Fourth of July, but many parents say they don't want it. Some don't even know about it.

Nicki Minaj with President Donald Trump at a January event spotlighting the new investment accounts for children. More than 6 million kids were signed up for the accounts, formally called 530A accounts, as of early June, according to the Treasury Department.

Davinya Hinojosa calls the new specialized investment accounts for children a "great opportunity," but the Kansas mother is not opening the so-called Trump accounts for her five kids, at least for now.

With one of her children receiving speech therapy each week, Hinojosa wants to know if putting money into the accounts will interfere with her daughter's eligibility for government benefits. "I would like more specific questions to be answered," she told MarketWatch. "I want to have more answers."

Among the many families she knows, Hinojosa thinks there are only about five who are even aware of the accounts - and they aren't enrolling yet, either. "They are going to look into it, just like me," she said. "They want to have more answers."

Even as she credited President Donald Trump for creating the accounts, she said "there's a lot of lack of trust between the community, families and government systems."

Opinion: 'Trump accounts' for newborns are nothing but a diversion

Parents and guardians can open the accounts for their children who are under age 18 and are U.S. citizens and, along with donors, they can start putting money into the accounts on July 4. The accounts could give those children a head start that may potentially be worth hundreds of billions of dollars in aggregate in the coming decades, according to one estimate.

The federal government is set to chip in $1,000 for babies born between 2025 and 2028. Meanwhile, a $6.25 billion donation from tech billionaire Michael Dell and his wife, Susan, will put $250 into the accounts of kids 10 and under who live in qualifying ZIP codes.

It's easy to find people praising this effort by the Trump administration to help kids start saving money early in life. It's been harder, however, to get parents to sign up.

More than 6 million kids were signed up for the accounts, formally called 530A accounts, as of early June, according to the Treasury Department. Nearly 1.5 million of those accounts were for babies eligible for the $1,000 in government seed money.

Meanwhile, there were 73 million children in the U.S. under age 18 as of 2024, according to Census Bureau data. Last year, 3.6 million children were born, according to the Centers for Disease Control and Prevention.

A lack of public awareness of the new accounts is a hurdle, experts say, as is the account design. Children are not automatically enrolled. Instead, parents and guardians have to sign each child up by filling out an IRS form.

Related: There's a 'Trump account' hack that can unlock decades of wealth-building for your kid

Questions about the fine print are keeping some parents, like Hinojosa, away for now. And the accounts are rolling out against a difficult economic backdrop for raising a young child.

Many financial planners view the accounts as starter retirement accounts. Once a child turns 18, the money can also be used penalty-free - but not tax-free - to pay for education, to make a down payment on a first home or for emergency savings.

"In theory, they sound like a good idea," said Anastasia Rigby. Still, the Oregon mother isn't planning to open a "Trump account" for her 4-year-old daughter, although she has already established a 529 college-savings plan for her.

Rigby, a longtime substitute teacher, is finishing up requirements for her teacher's license and plans to care for her daughter this summer instead of working. There are no summer daycare options in her rural part of the state, and the pay for a summer job wouldn't cover daycare costs, anyway.

With the cost of childcare "so exponentially high," Rigby said, "It's really hard to think of saving when you are just trying to survive in this economy right now."

Hinojosa and Rigby represented their states at Strolling Thunder, a rally organized in June in Washington, D.C., by Zero to Three, a group that advocates for parents and young children.

Many parents Rigby meets are skeptical of the accounts, while expectant parents whose newborns will qualify for the $1,000 are excited about them. But overall, not many people are aware of the accounts, she said.

Commonwealth, a nonprofit focused on economic security for financially vulnerable people, has been talking to low- and moderate-income parents about the accounts. Early findings show the $1,000 is a powerful draw for the people who have signed up and for those considering enrollment, said Timothy Flacke, the organization's co-founder and CEO.

But the "Trump" branding was polarizing for some parents, and that could present a challenge for organizations and messengers trying to spread the word about the accounts without appearing to take a political stance, Flacke said in an email to MarketWatch. "Neutral, transparent, and widely available language was the top recommendation to overcome the 'Trump account' name as a barrier," he said.

One path forward could be focusing on the accounts' wealth-building potential while referencing Trump together with 530A, the part of the tax code governing the accounts, according to researchers. The strategy would "clearly identify the accounts without leaning into political branding," Flacke said.

Many families were still looking for specifics about the accounts, how they fit with other investing accounts and whether the option would continue to exist under future administrations, according to Commonwealth's interviews with parents and experts.

Two in 10 parents didn't know about the new accounts and 27% said they didn't plan to open one, according to a BabyCenter poll, while 54% planned to get an account.

New research highlights the possibilities for the accounts, if there is wide participation and if the program continues for at least a decade.

Depending on how much money goes into them, the accounts could generate, in aggregate, anywhere from roughly $80 billion to $900 billion for low-income families, according to a McKinsey & Co. report.

Researchers calculated what could happen if every newborn child in high-poverty census tracts received seed money in the accounts but made no extra contributions over 18 years.

Although at this point, newborns will only be eligible for the free $1,000 through 2028, the report modeled what could happen if the money was given to babies born over an entire decade.

With $1,000 in seed money, babies born over the span of 10 years could collectively amass $83 billion. With $1,000 in seed money and another $10,000 from other sources, including donors, they could rake in $917 billion.

The findings aren't meant to show what might or might not happen, said Duwain Pinder, a co-founder and leader of the McKinsey Institute for Economic Mobility. Instead, they are meant to show the potential. "The reason we wrote this report is a call to action," he told MarketWatch.

Right now, households in the bottom quartile of income have an average net worth of around $3,000. At the 75th percentile, households are worth around $1 million, he said. With broad participation, the accounts could narrow the wealth gap - but parents have to sign up for the accounts, he said.

It will likely take time for the new accounts to gain traction, even when there are lots of enticements to enrolling.

Parents have been signing up for 530A, or "Trump," accounts at a faster pace compared with when they were first able to open 529 accounts. These education-savings accounts became available in 1996 and got more attractive in 2001, thanks to more favorable tax treatment.

When funds from a 529 are used for qualifying educational expenses, like tuition, there's no federal income tax and generally no state income tax. Even so, it took until 2003 before there were 6 million 529 accounts. At the end of last year, there were almost 17.7 million.

It's too soon to say whether the Trump-branded accounts will be underused, Pinder said. They are a "brand-new asset class" for families building their child's financial resources, he said. "Awareness is still being built."

Financial planner Josh Radman, owner of Denver-based Presidio Advisors, opened an account for his new baby in order to get the $1,000. Once the money lands in the account, he'll let it grow with the market but will likely not add money himself, he said.

The money will go into low-cost index mutual funds and exchange-traded funds tracking U.S. stocks. The $1,000 in seed money would grow to roughly $5,000 by the time a child turns 18, according to the McKinsey report's scenarios.

"There's a whole bunch of nuance with Trump accounts that make contributing to them potentially more hassle and more headache than what they are worth," Radman said. Those hassles include questions about issues like gift-tax reporting and the potential for account growth to be taxable in certain states.

The IRS clarified Monday that people making 530A account contributions don't have to file a gift-tax return that flags the donation to the taxman.

Radman has made sure clients with new babies know about the accounts and claim the starter money. Now it's a question of how to use the accounts beyond that - if at all, he said. "How do we think about this more broadly beyond the $1,000? That's the conversation I'm starting to have."

There are other ways to deploy money and invest for a child's future that have more advantages, Radman said, adding that he is generally not recommending clients put their own cash into the accounts.

See also: Opening a 'Trump account' for your children? Here is the risk you need to recognize first.

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