U.S. Treasury proposes investment rules for Trump Accounts

The U.S. Treasury Department and the IRS have proposed new regulatory guidance for Trump Accounts, tax-advantaged savings vehicles (formally known as 530A accounts) designed for children born between 2025 and 2028.

The proposed rules establish strict criteria for eligible investment products, emphasizing low-cost options to maximize compound growth. To qualify, funds must track indices composed of at least 90% U.S. companies by weight, avoid leverage, and maintain annual fees no higher than 0.1%.

Notably, the framework includes a formal ban on ESG-focused funds. This exclusion applies to mutual funds or ETFs that track ESG indices or utilize sustainability branding in their marketing. Trustees managing these accounts are required to verify compliance annually and must divest any ineligible holdings within 30 days of identification.

Trump Accounts feature a $1,000 government seed contribution and allow annual contributions of up to $5,000. Current default and available options include various S&P 500 and Total Stock Market ETFs from providers such as State Street, iShares, and Vanguard. Bank of New York Mellon serves as the official manager, while account monitoring is facilitated through an app developed with Robinhood.