Kids' money after Trump Accounts: savings account, UTMA, 529 or Trump Account?
By the SwitchWize Research Desk
The short answer
Where should my child's money go now that Trump Accounts exist: a kids' savings account, a UTMA, a 529 or a Trump Account?
Keep money you need within five years in an insured savings account. Use a 529 for education costs at least five years out. A Trump Account suits a long head start you will not touch before adulthood. A custodial account suits gifts the child will own. Check the kiddie tax line before building a big balance in a child's name.
Rates as of Treasury plans to start auto-enrolling eligible children into Trump Accounts on or about October 1, 2026. Parents then claim the account.
projected in an insured savings account after 10 years
Year-one interest of $66 stays inside the untaxed band.
Best fit: Insured savings account. While the purpose is open, insured savings keeps every option available. Move to a 529 or Trump Account once the goal is clear.
Best fit
Insured savings account
Interest earned over the horizon
$3,392
Interest in year one
$66
Yearly unearned income (year one)
$66
Estimated federal tax, year one
$0
Trump Account yearly contribution limit
$5,000
How we calculated this
The chooser is a rule set: money needed inside five years routes to insured savings (house guidance, not a regulation); education goals with a longer runway route to a 529; long-term goals route to a Trump Account or a custodial account depending on who you want in control. The projection treats your APY as an effective annual yield, with daily compounding already inside it, so monthly growth is (1 + APY) to the power of one twelfth, minus one, and your monthly amount is added at month end. The kiddie tax estimate leaves the first band of the child's unearned income untaxed, taxes the next band of the same size at the child rate you enter, and taxes anything above that at the parent rate you enter. The band size comes from the IRS annual figure in our facts registry; when that figure is not verified, no estimate is shown. It ignores the child's earned income, itemized deductions and state tax. Educational only, not tax advice.
Your number
$16,392
projected in an insured savings account after 10 years
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Four vehicles side by side
The highlighted row is the best fit for the answers above.
Insured savings accountBest fit
Liquidity
Withdraw any time
Tax on growth
Interest is taxable each year; a child's interest can trigger the kiddie tax
Control at adulthood
Stays with the owner; in your name it never passes to the child
Penalty or catch
None
Deposit insurance
Yes, up to the standard limit
Custodial account (UTMA/UGMA)
Liquidity
Custodian can spend it for the child's benefit
Tax on growth
Growth is taxed to the child, and the kiddie tax applies
Control at adulthood
Passes to the child at the age your state sets
Penalty or catch
The gift is irrevocable
Deposit insurance
Bank deposits are insured as the child's single account
529 plan
Liquidity
Flexible, but non-education use adds tax
Tax on growth
Growth is untaxed when used for qualified education costs
Control at adulthood
The account owner keeps control and can change the beneficiary
Penalty or catch
Earnings used for non-qualified costs are taxed, plus an additional tax
Deposit insurance
Usually invested in market funds, not insured deposits
Trump Account
Liquidity
Distributions are generally not permitted during the growth period
Tax on growth
Treated as a traditional IRA with special rules during the growth period
Control at adulthood
Managed by the responsible party; see the claim steps
Penalty or catch
Locked in; contributions are capped each year
Deposit insurance
Invested in equity index funds, not insured deposits
Comparison of insured savings, custodial, 529 and Trump Account options for a child
Vehicle
Liquidity
Tax on growth
Control at adulthood
Penalty or catch
Deposit insurance
Insured savings accountBest fit
Withdraw any time
Interest is taxable each year; a child's interest can trigger the kiddie tax
Stays with the owner; in your name it never passes to the child
None
Yes, up to the standard limit
Custodial account (UTMA/UGMA)
Custodian can spend it for the child's benefit
Growth is taxed to the child, and the kiddie tax applies
Passes to the child at the age your state sets
The gift is irrevocable
Bank deposits are insured as the child's single account
529 plan
Flexible, but non-education use adds tax
Growth is untaxed when used for qualified education costs
The account owner keeps control and can change the beneficiary
Earnings used for non-qualified costs are taxed, plus an additional tax
Usually invested in market funds, not insured deposits
Trump Account
Distributions are generally not permitted during the growth period
Treated as a traditional IRA with special rules during the growth period
Managed by the responsible party; see the claim steps
Locked in; contributions are capped each year
Invested in equity index funds, not insured deposits
Educational only, not tax or investment advice. Rules change; the facts behind this table carry review dates in the methodology.
When does my kid control it?
Insured savings in your name
Never passes to your child automatically
It is your money until you choose to gift or move it.
Custodial account (UTMA/UGMA)
At the age your state sets
The gift is irrevocable. At that age the child can take full control, whatever you intended.
529 plan
The account owner keeps control
The owner can change the beneficiary, so the child does not take over at adulthood.
Trump Account
Growth period ends December 31 of the year the child turns 17
Distributions are generally not permitted before then. After it, traditional IRA rules generally apply.
Trump Account rules as of
Find your situation
When will you need this money?
Treasury plans to open a new kind of account for many children, and it is fair to wonder whether that changes where the rest of your child's money belongs. It adds an option. When you will need the money still decides which account does the job.
What changes for my child's money on October 1?
Treasury plans to create a Trump Account, which it calls an auto account, for each eligible child on or about October 1, 2026.1 Eligible generally means a child who has not turned 18 by the end of the election year and has a Social Security number.2
Children for whom someone other than Treasury already filed an election are not part of that batch.3 Children born from 2025 through 2028 who are U.S. citizens with a Social Security number can also receive a one-time $1,000 pilot deposit from Treasury.4
You still have your other choices, and each one does a different job.
Where should money I need within five years go?
Money needed within about five years belongs in an insured savings account, because a market dip cannot shrink a deposit before you need it.
That is SwitchWize guidance, not a regulation. Top high-yield savings accounts currently pay up to 4.27% APY. A custodial deposit account is insured as your child's own single account when the bank's records show its custodial nature.5 Our FDIC coverage guide shows how coverage adds up across your household, and our FDIC check confirms a bank's status.
Which account fits a long goal like college or a head start?
For education at least five years away, a 529 usually fits best. For a long head start you will not touch, a Trump Account or a custodial account fits, depending on who you want in control.
A 529's earnings are tax-free to the extent you use them for qualified education costs. Earnings used for anything else are taxed, and a 10 percent additional tax generally applies.6
A Trump Account is stricter. Distributions are generally not permitted during the growth period, and cash must generally be invested in funds that track a broad index of U.S. stocks.7 Contributions are generally limited to $5,000 a year.8 It is not an insured deposit, so it is a poor home for money you may need early. The Trump Account vs 529 vs custodial Roth comparison goes deeper on investment tradeoffs.
How do I claim my child's Trump Account?
A parent or legal guardian claims an auto account through an electronic application Treasury makes available, after proving identity and legal authority.9
Claiming moves the whole balance into a claimed account with Treasury's trustee or into a Trump Account at another trustee you choose. You may still need to activate that claimed account by signing its account agreement. Step-by-step detail lives in how to open a Trump Account, and who qualifies covers eligibility edge cases. New parents can start with our new parent finances page.
Does a child's savings interest get taxed?
Yes, it can be taxed. The kiddie tax matters only once a child's unearned income is large enough, and for 2026 the IRS amount that reduces the net unearned income subject to it is $1,350.10
In the 2025 instructions, unearned income over $2,700 was taxed at the parent's rate when that rate is higher.11 The calculator above estimates your child's first-year interest and shows a tax figure only when we have verified the IRS thresholds it relies on. Until then it says the thresholds are unverified rather than guessing. Money kept in your own name stays yours, which also means it is not legally your child's.
When does my child take control of the money?
That varies by account. A custodial account passes to the child at an age set by state law, and a Trump Account follows its own growth-period rules.
The age for custodial accounts varies by state.12 A Trump Account's growth period ends on December 31 of the year your child turns 17, after which it generally follows traditional IRA rules.7 The timeline under the calculator lays the four paths side by side. For a first account for a teen, see the best high-yield savings account for a kid or teen.
If you are also saving for a home purchase, the down payment guide covers that separate short-term goal. The Trump Account planner projects long-term growth.
Key facts
Treasury plans to establish Trump Accounts for eligible children on or about October 1, 2026, under a rule published in the Federal Register on September 30, 2026.
Children born from 2025 through 2028 who are U.S. citizens with a Social Security number can receive a one-time $1,000 Treasury pilot deposit, per the IRS Form 4547 instructions.
Trump Account contributions are generally limited to $5,000 a year during the growth period, per the Federal Register rule published September 30, 2026.
For taxable years beginning in 2026, the amount that reduces net unearned income subject to the kiddie tax is $1,350, per IRS Revenue Procedure 2025-32.
A 529 distribution not used for qualified education costs faces a 10 percent additional tax on the taxable earnings, per IRS Publication 970 (2025).
Do I have to do anything for my child to get a Trump Account?
Not to have an account exist. Treasury plans to create auto accounts for eligible children on or about October 1, 2026. To control one, a parent or legal guardian must claim it and prove identity and legal authority.
Is a Trump Account FDIC-insured?
No. During the growth period, cash must generally be invested in funds that track a broad index of U.S. stocks, so the balance can fall as well as rise. Insured savings is the place for money you need soon.
Can I put my child's money in my own savings account instead?
Yes. Money in your own name stays yours and never passes to your child automatically. The tradeoff is that it is not legally your child's, and the interest is income you report. Ask a tax professional how that fits your situation.
Is a child's savings interest taxed?
It can be. Interest is unearned income. For 2026 the IRS amount that reduces net unearned income subject to the kiddie tax is $1,350. For 2025, unearned income over $2,700 was taxed at the parent's rate when that rate is higher.
Can I move a custodial account to a 529 later?
Money in a custodial account belongs to the child. Moving it into a 529 is possible but has tax and ownership consequences, so ask a tax professional before you do it.
Methodology and sources
Data
Live rates come from the SwitchWize Canonical Market Data Layer. Snapshot 2026-10-01v1 as of . Calculators assume daily compounding unless the calculator says otherwise.
An election on Form 4547 does not by itself establish a Trump Account: the account must be activated by signing the account agreement. A child for whom a person other than the Secretary already made an election is not part of the October 1 auto enrollment, and any account established after auto enrollment begins is an auto account. Federal Register, T.D. 10056, section 1.530A-1T(d)(2) and (d)(3); IRS Instructions for Form 4547, verified .
Eligible children born after December 31, 2024 and before January 1, 2029 who are U.S. citizens with a valid Social Security number can receive a one-time $1,000 pilot program contribution from the U.S. Treasury. IRS, Instructions for Form 4547 (Rev. December 2025), verified .
UTMA and UGMA custodial deposits are owned by the child and insured by the FDIC as the child's single account, up to the standard maximum deposit insurance amount, separately from the custodian's own accounts at the same bank, provided the bank's records show the custodial nature of the account. FDIC, Financial Institution Employees Guide to Deposit Insurance, Single Accounts, verified .
Earnings on a 529 plan (qualified tuition program) distribution are tax-free to the extent the beneficiary has qualified education expenses; earnings on a distribution not used for qualified expenses are taxable, and a 10 percent additional tax generally applies to the amount included in income, subject to listed exceptions such as the beneficiary's death. IRS, Publication 970 (2025), Qualified Tuition Programs, Additional Tax on Taxable Distributions, verified .
The growth period runs from the day the initial Trump Account is established through December 31 of the calendar year in which the beneficiary attains age 17. Distributions are generally not permitted during the growth period, and cash must generally be invested in funds that track a broad index of U.S. equities, with no borrowed money used to amplify returns, and with annual fees and expenses not above 0.1 percent. Federal Register, T.D. 10056 preamble and section 1.530A-1T(b)(3), verified .
During the growth period, contributions to a Trump Account are generally subject to an annual limit of $5,000, adjusted for inflation for taxable years after 2027. Pilot program contributions, qualified general contributions and qualified rollover contributions do not count toward it. Federal Register, T.D. 10056 preamble; IRS Instructions for Form 4547 (Rev. December 2025), verified .
A guardian or legal custodian can claim an auto account through an electronic application or web page made available by the Secretary, must authenticate their identity and establish legal authority, and must execute any required consent. During the growth period, claiming transfers the entire balance by qualified rollover to a claimed initial Trump Account with the Treasury-selected trustee or to a rollover Trump Account with another trustee. Federal Register, T.D. 10056, section 1.530A-1T(f), verified .
For tax year 2025, unearned income over $2,700 of a child under age 18 (and certain older children) is taxed at the parent's rate if that rate is higher, and Form 8615 is required when the child had more than $2,700 of unearned income and must file a return. IRS, Instructions for Form 8615 (2025), verified .