New tax-deferred 530A accounts allow parents to invest up to $5,000 yearly in S&P 500-tracking funds for children under 18.
A new type of tax-deferred investment account for children, dubbed “Trump accounts,” began trading Monday. The 530A accounts allow contributions of up to $5,000 annually, invested exclusively in the State Street SPDR Portfolio S&P 500 ETF (SPYM).
Lawmakers introduced the accounts one year ago, but surveys indicate low public awareness. Funds must remain invested until the child turns 18, when the account converts to a traditional IRA. Early withdrawals face penalties unless used for specific expenses.
President Donald Trump marked the launch by ringing the opening bells at the New York Stock Exchange and Nasdaq.