Low Enrollment in Child Savings Accounts Highlights Access and Naming Challenges

Trump accounts, the child investment accounts created by last year’s tax legislation, opened for contributions on Saturday. To date, more than six million American children have been enrolled, according to a Treasury Department spokeswoman—under 10 percent of eligible minors.

Children born during a four‑year window beginning Jan. 1, 2025—covering the second Trump term—will receive a $1,000 federal deposit. So far, only 1.4 million children in that cohort have been enrolled, roughly one‑quarter of those who qualify. Older children are also eligible for contributions from philanthropists and employers.

The administration has highlighted the number of accounts opened. Researchers who study child savings accounts welcome the millions of families that have participated but note significant barriers. Many families are unaware of the accounts, and some are deterred by the name’s association with President Trump.

Researchers argue that automatic enrollment—rather than requiring parents to sign up on a tax form—would dramatically increase participation.

Critics across the political spectrum worry the accounts may primarily benefit families already investing in the market, such as those with 529 college plans, rather than extending market access to children who lack it.

Nevertheless, families from various income levels have opened Trump accounts. H&R Block assisted more than two million of its tax‑preparation clients in enrolling, accounting for about a third of all new accounts. Thirty percent of clients with eligible children opened accounts, and enrollment was 99 percent among those qualifying for the free $1,000.

“It’s an indicator that investing in your kid’s future and getting some free money is a strong motivator,” said Jason Ewas of the Aspen Institute Financial Security Program.

The administration estimates that a $1,000 investment at birth could grow to roughly $6,000 by age 18. Charities, governments, family, friends, and employers can contribute cash or public‑company stock. Donors to date include Michael and Susan Dell, who have pledged $250 per child, the state of Oklahoma with a $250 contribution, and Micron, which announced a $250 deposit for up to one million children.

About 60 percent of Americans own stock, a group that is disproportionately white, college‑educated, and high‑earning. Research shows the stock market is now a major driver of the racial wealth gap, which exceeds the income gap.

“Families who do not file taxes, have limited digital access, or are less comfortable navigating financial systems are therefore more likely to be left out,” said Stephen Roll, research director at Washington University’s Center for Social Development. “Those are likely to be the families with the lowest incomes and the highest need for programs like this.”

These dynamics—combined with higher distrust of Trump among non‑white Americans and the greater capacity of high earners to fund accounts—raise concerns that the program could widen both the racial and overall wealth gaps.

“I admit that I think they will increase inequality,” said Ray Boshara, senior policy adviser at Washington University and the Aspen Institute. “However, I say it’s worth it because that’s the price you pay for getting all families in, low‑wealth families in.”

The administration has made outreach to low‑income families a priority. First Lady Melania Trump recently announced an initiative to provide accounts for foster children.

“The accounts will ensure that every American child can benefit from private ownership and compound growth; that every American baby, in short, is born a shareholder,” Treasury Secretary Scott Bessent said last month.

By law, funds in Trump accounts must be invested in low‑cost index funds. When children turn 18, the accounts become IRAs, allowing withdrawals for qualified expenses such as college tuition, home purchase, or retirement without penalty.

Awareness remains a barrier. A June online survey of U.S. adults by polling firm Public First found only about 20 percent of respondents knew what Trump accounts were, and another 30 percent had heard of them but could not explain them.

People earning under $25,000 were the least aware—just 11 percent.

The administration’s outreach plans include partnerships with community groups, billboards in under‑served areas, a Super Bowl ad, and incorporation of the accounts into financial‑literacy curricula in states such as Oklahoma.

The program’s name—originally “Invest America accounts”—has also proved polarizing. Although the policy enjoys bipartisan support, the Trump branding has discouraged some potential participants, according to research. (The enrollment tax form, 4547, references Trump’s presidencies.)

Interviews conducted by Commonwealth, a nonprofit focused on wealth building for low‑income families, reveal that many respondents find the name divisive, leading to hesitancy or distrust. Parents were more likely to enroll when their children qualified for the $1,000 deposit.

The Public First poll showed broad support for child savings accounts across political lines, but support fell when the accounts were labeled “Trump accounts”: 37 percent of Kamala Harris voters supported them versus 69 percent of Trump voters.

Researchers argue that automatic enrollment, similar to many employer‑sponsored retirement plans, is crucial to reaching the most children.

Currently, parents must complete a form or check a box on their tax return to open an account. Past experiments with comparable accounts in Maine and Oklahoma showed that voluntary sign‑up yields low participation, especially among low‑income families, whereas opt‑out models achieve near‑universal enrollment.

“Without auto‑enrollment, you’re going to miss a lot of low‑income kids,” Boshara said.

The Treasury is reportedly considering auto‑enrollment, though privacy regulations that limit data sharing across agencies present obstacles.

The foster‑child initiative, which allows states to open accounts on behalf of children, may serve as a model for broader implementation.

Another factor cited by Treasury officials is cost efficiency: automatically enrolling children whose families are unlikely to make additional contributions, or who are older and would benefit less from compounding, could be administratively burdensome.

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