On a recent June morning, Savannah McConneaughey, age 7, joined three other children at Kellogg’s Diner in New York to discuss their investment portfolios. “I’m saving for new clothes, new shoes, toys and maybe … ” she paused to think, “a mansion.”

Next to her, 12-year-old Naima McElroy lamented the financial habits of her peers. A lot of her classmates have trouble saving, she said, because they spend all their money on Robux (the currency used in the online game Roblox), NeeDohs (squishy toys) and Squishmallows (other squishy toys). “It’s harder to make good money decisions because of the internet,” she said with a sigh.

Savannah agreed, saying, “Like, you can spend your money on stuff that you want, but don’t spend all your money on stuff that you want.”

Over breakfast, the young investors had gathered at the behest of Acorns Early, a child-friendly spinoff from Acorns, a savings and investment app. Known primarily for enabling users to invest their spare change (Acorns will automatically round up transactions to the nearest dollar and invest the difference), the company joins the many investing platforms — like Robinhood, Schwab, Vanguard and Fidelity — that are rushing to cater to a growing group of new customers: children. Acorns has even recruited its own “kid advisory board,” which includes Savannah and Naima, to review the app’s features.

Opening an investment account for a child used to be something only wealthy parents did, often with the help of a financial adviser. But over the past decade or so, the rise of retail investing has given pretty much anyone the ability to invest small amounts via easy-to-use apps and websites.

“Investing has never been more accessible than it is right now,” said Mallory Baska, 35, a mother of two young children who offers financial education services through her company, Money Talk Mal. “Along with that, there is a massive increase in awareness and interest in investing for your kids.”

The splashy arrival of Trump accounts, a new type of tax-deferred investment account for minors, has added to this momentum. Also known as 530A accounts, named for the section of tax code that provides for them, Trump accounts function similarly to a traditional individual retirement account, except that anyone can contribute to the account on behalf of the child.

The accounts, created under the domestic policy bill last summer, opened to the public last week. To encourage participation, the government will give millions of babies born during the Trump administration a $1,000 seed contribution. The website for Trump accounts claims that if a newborn’s account receives the initial $1,000 and no further contributions, it could be worth $243,000 by the time its recipient turns 55. But that calculation relies on strong, consistent market returns that are impossible to predict.

Philanthropists and corporations have also vowed to sweeten the pot for Trump accounts. Hedge fund manager Ray Dalio pledged $75 million to pad Trump accounts for certain children in Connecticut, and Michael Dell, the CEO of Dell Technologies, gifted $6.25 billion to children under 11 who live in lower-income ZIP codes. A growing list of companies including Goldman Sachs, Comcast, Intel, Morgan Stanley and others have promised to match the government’s deposit of $1,000 for children of their employees.

There are strings attached, of course. All Trump accounts must be invested in low-cost mutual funds or exchange-traded funds that track broad U.S. equity indexes, such as the S&P 500, and there’s a $5,000 annual cap on contributions.

Recipients will need to activate their accounts through Robinhood, an e-trading platform that has partnered with the U.S. Treasury and Bank of New York Mellon to kick off the program, although they will be permitted to move their accounts to another qualified brokerage. And, as is the case with a traditional IRA, beneficiaries cannot withdraw money before the age of 59 1/2 without a considerable tax penalty (although there are some qualified exceptions, like educational expenses). So even when a child turns 18 and gains access to their funds, they won’t be able to touch the money without serious tax consequences.

A Head Start, on One Path

No parents want to turn down free money for their children. But there are other ways to invest for them, too — and Trump accounts may not be your best option, Baska said. She is opening a Trump account for her younger son, who was born in 2025 and qualifies for the $1,000 deposit. She doesn’t plan to contribute to it further right now, though, and she’s not opening one for her older son, who is 3 and ineligible for the seed funding. Instead, she’s going to focus on their 529 plans, which provide tax-advantaged savings for education.

“The reason I’m prioritizing my kids’ 529s is that the most expensive thing that many children have to contend with as young adults is a college degree,” she said. Her parents invested in her 529 account when she was young, enabling her to graduate from college without any student loans. “I am extremely passionate about paying for my own children’s education because I saw how impactful it was to start my career at 22 with a blank slate.”

A major strength of Trump accounts is that they motivate parents to start investing for their children from birth — the administration announced last week that parents would even be able to enroll their newborns at the hospital. “It’s becoming part of the to-do list when parents have a new baby in a way that it wasn’t before,” said Natalie Gordon, the CEO of Babylist, an online baby registry that recently expanded to help expecting parents set up 529 or 530A accounts and solicit contributions. (Babylist calls them 530A accounts to depoliticize the conversation, Gordon said.)

“Investing for your child used to be one of these chores where it felt like, ‘If I do it in a year instead of today, is it really that big a difference?’” she added. “We know that the answer is actually yes. The nature of compound growth means that earlier is better.”

Another, more versatile option to invest for your child is a custodial brokerage account, which has no specific tax advantages but offers looser restrictions on how much money can be invested and when the child can take it out. That’s the type of account offered by Acorns Early, which includes educational features to encourage children to get involved. Parents can allow their children to invest their allowances or money earned from doing chores or odd jobs.

“We want kids to see that $3 a day, if you stick with it, can make a world of difference over a long period of time,” said Noah Kerner, the CEO of Acorns. The learn-by-doing model is also geared toward preventing children from blowing their accounts when they gain access to them.

A Benefit With Downsides

It won’t help all children equally, though, said Ismael Cid-Martinez, with the Economic Policy Institute. “It’s a good idea for families that are already positioned to save,” he said. “But I’m deeply concerned about families who can’t afford to save, which represents the bulk of U.S. adults.”

Those families won’t be able to contribute to their children’s investment accounts, he said, and even if their babies are eligible for the Trump account seed funding, that won’t provide enough of a cushion to make a meaningful difference. The result, he fears, will widen economic disparities.

“If the government really wanted to do something to help families in need,” Cid-Martinez said, “it could bring back some of the programs that were introduced in response to the COVID-19 pandemic, like the expansion of SNAP benefits and the child tax credit, which cut child poverty in the U.S. nearly by half.” Child poverty rebounded quickly after the programs expired; SNAP benefits have since been slashed further by the law that established Trump accounts.

Teresa Ghilarducci, a labor economist and professor at the New School for Social Research, agreed that many families needed more immediate support. “Helping parents invest for their children may build wealth, but it doesn’t address the fact that many parents don’t have the income to provide for their children today,” she said. “It’s like saying, ‘You can eat a sandwich in the future, but not right now.’”

Still, it’s a free sandwich. On Monday, President Donald Trump celebrated the start of the accounts bearing his name by ringing the opening bell for the New York Stock Exchange and Nasdaq in the Oval Office, flanked by children. More than 6 million children have been signed up for the accounts, a Treasury Department spokesperson said, but that’s less than 10% of those who are eligible. By comparison, about 18% of minors have a 529 account. It remains to be seen how much the new accounts will help Americans save. But they have piqued public interest in doing so.

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This article originally appeared in The New York Times.

By Charlotte Cowles/Chase Castor

c.2026 The New York Times Company