Investment Accounts for Babies Are Coming. Wall Street Can’t Wait.
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What are Trump accounts and how do they work?
Last week, Michael Dell, the CEO of Dell Technologies, made a big announcement.
Thank you, Mr. President. It's a great honor to be with you here in the White House.
Dell and his wife Susan revealed that they would be donating more than $6 billion towards a new government program.
Susan and I are super excited to announce our $6.25 billion gift to 25 million American children, 10 and under.
The contribution would dramatically expand a new tax-advantaged account for minors, known as Trump accounts.
Trump accounts.
Trump accounts.
Trump accounts.
The families that opt in will receive a one-time payment of $1,000.
They must invest in diversified, low-cost U.S. stock index funds. I talked to our colleague Alexander Saidi about this. What is a Trump account?
It's an IRA for babies through a very small seed investment of $1,000 for any child born between the beginning of 2025 and the end of 2028.
Babies who are U.S. citizens born between 2025 and 2028 are eligible for a $1,000 grant from the federal government to be invested in a tax-advantaged account for their future. The program was signed into law last summer as part of Trump's Big Beautiful Bill, and it's set to launch in early 2026. Alex says that from the jump, corporate America wanted to be a part of it. Not just philanthropist billionaires like Michael Dell, but also banks and brokerages that see a major opportunity in participating in the program.
The idea is to have multiple private institutions offering Trump account rollovers. So you can keep your money with the financial institution of your choosing. And so with the Trump account, the business world is excited about, specifically on Wall Street, about being a part of it.
Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Wednesday, December 10th.
coming up on the show, why Wall Street is all in on Trump accounts.
The idea to create better investment tools for young people has been around for a while, but one venture capitalist has taken it up as his mission. His name is Brad Gerstner, and he's been working on the idea since at least 2021, and he'd gotten support from some Democrats, but he was having trouble getting it off the ground.
He had wanted to get President Joe Biden to buy in on the idea, but just couldn't successfully get an audience with him.
Then last year, a friend of Gerstner's happened to be playing a late-night poker game at the Bellagio Hotel in Las Vegas.
And he was near Senator Ted Cruz, and he told Cruz that Gerstner wanted to bring stock investment accounts to young Americans through an outfit he has called Invest America. And days later, he was in Senator Cruz's office talking about how could we make this a reality for... young Americans.
By June, Gerstner was at the White House for a roundtable event on the initiative. With him was President Trump, along with Michael Dell, Goldman Sachs CEO David Solomon, Robinhood's Vlad Tenev, and other big names in finance. At the event, Trump called the idea, which by then had been named Trump Accounts, one of the most exciting parts of the tax bill he would sign into law in July.
I also want to thank you for being here as we discuss one of the most exciting parts of the one big, beautiful bill. It is indeed a big, beautiful bill, and it's doing very well. The Trump Accounts, as they call it.
Can you just walk me through how a Trump account would work?
This is all like being worked up in real time. There's still a lot of details that aren't fully fleshed out. But more or less what we know is that families will be able to sign up for the accounts and get access to $1,000 with the Treasury Department. But what they'll allow you to do is to roll it over into a financial institution of your choosing.
Why is Wall Street excited about investment accounts for babies?
That $1,000 becomes a kind of seed fund for eligible children. Once the account is open, parents, relatives, friends, really anyone, can contribute up to $5,000 a year. Contributions can be made starting on July 4th, 2026. So how does this investment work? What happens to this money?
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