The U.S. Treasury has announced temporary and proposed rules to automatically open "Trump Accounts" for eligible children under 18, with the Treasury Secretary acting on their behalf. This landmark initiative shifts from parents actively applying to a bulk enrollment system. The rules state that automatic account openings will begin around October 1, potentially increasing the number of enrolled children by over 60 million by 2026, with an additional 2 million each year thereafter.

Treasury Secretary Scott Bessent stated on September 15 at the House Financial Services Committee that approximately 7 to 8 million children are currently registered, and this number is expected to rise to about 70 million within a month due to automatic enrollment. Accounts opened for contributions on July 4 required authorized adults to fill out IRS Form 4547 or select enrollment through a designated website, but participation from low-income families has been low. The Treasury noted that it could not resolve legal and operational issues for large-scale automatic enrollment before the July launch, and has now adopted a structure where "each eligible child has a separate account, separate bookkeeping, and funds are transferred to a main trust for unified investment" to protect taxpayer information.

Eligible individuals are those under 18 by the end of the year, who have a Social Security number, and have not had an account opened on their behalf. U.S. citizens born between 2025 and 2028 will still receive a one-time pilot funding of $1,000 from the Treasury, but this money will require a separate election by an authorized adult and will not be automatically deposited with the account opening. During the growth period, the annual after-tax contribution limit is $5,000, with employers able to contribute up to $2,500; funds must be invested in mutual funds or ETFs that track U.S. companies, are unleveraged, and have an annual fee not exceeding 0.1%, or will be designated by the trustee if not chosen. Upon turning 18, the account will be treated according to traditional IRA rules, with general withdrawals not allowed prior to that.

To receive the automatically opened account, identity verification, proof of legal authority, and disclosure completion are required. The accounts are currently managed by trustees such as BNY and Robinhood, and can roll over to other approved institutions. The rules also cover eligible general contributions and eligible stock contributions. The Treasury had previously stated it did not intend to automatically open accounts for children due to privacy law concerns, but has now found an executable structure under pressure from comments.

In market mechanisms, this is a policy-driven forced expansion: the buyers are the funds automatically placed in minor accounts tracking low-fee U.S. stock indices, along with subsequent contributions from parents, employers, state governments, and charities; the sellers are the trustees and index funds that gain massive custody and index management scale. Funds flow from federal pilots, after-tax family savings, and employer benefits into U.S. broad-based stocks. Beneficiaries include index product providers and financial institutions that have taken on custody, as well as families that have finally been included in the system; the pressured parties are the Treasury and IRS, which must handle tens of millions of empty account claims, privacy, and guardianship disputes, as well as the pilot qualification children who still need to actively apply for the $1,000 seed. Automatic account opening does not equal automatic funding, with scale preceding the availability of funds.

Source: Public Information