IRS proposes what Trump accounts can invest in, and what trustees must do

Trump accounts are a new kind of IRA for children, created under section 530A of the Internal Revenue Code. On 21 August 2026 the IRS and Treasury proposed rules on what money in those accounts may be invested in while the child is young (91 FR 54280). The proposal says plainly that it affects "only trustees of Trump accounts," so this one is for any bank or credit union that acts as an IRA trustee or is weighing whether to offer these accounts.

Comments and hearing requests are due by 20 October 2026.

The basics

The proposal describes a Trump account as "an individual retirement account (as defined in section 408(a)) (IRA) not designated as a Roth IRA," with extra rules during a "growth period." That period ends "on December 31 of the calendar year in which the account beneficiary reaches the age of 17."

Contributions are "subject to an annual limit of $5,000, adjusted for inflation." There is also a pilot program: the Secretary "will pay $1,000 to the Trump accounts of eligible children," meaning a U.S. citizen "born in 2025, 2026, 2027, or 2028 who has been issued a social security number."

What the money can be invested in

During the growth period, the funds can go only into an eligible investment. The statutory test, which the proposal fills in, is a mutual fund or exchange traded fund that tracks a qualified index, meets a few other conditions, and does not have "annual fees and expenses of more than 0.1 percent of the balance of the investment in the fund."

The proposal would require a qualified index to be made up of equity investments in primarily U.S. companies. And it says that "any investment fund that tracks the returns of an ESG index is not an eligible investment."

What trustees must do

Most of the operational weight falls on the trustee. Under the proposal, a trustee "must ensure that Trump account funds are invested only in one or more eligible investments." It "must limit the investment or investments available for a Trump account during the growth period." It "must establish for each Trump account under the trustee's administration a default eligible investment," and "must clearly disclose to each account beneficiary the default eligible investment." It may change that default from time to time and may follow the beneficiary's instructions.

The preamble explains the choice: "The trustee is in the best position to ensure that an account meets requirements" of the statute. Fees a trustee charges for providing the account are not counted toward a fund's 0.1 percent cap.

What it could mean

Many community banks and credit unions offer traditional IRAs as deposit products: IRA savings accounts and IRA certificates. As we read the proposal, that model doesn't fit a Trump account during the growth period. The eligible investments are index mutual funds and ETFs, and nothing in the proposed list looks like a share certificate or a CD. We'd want counsel to confirm that reading, but if it holds, an institution can't simply add "Trump account" as a new IRA product code on the core.

That leaves a decision. One path is to offer the accounts through a brokerage or trust partner that can hold the funds, which brings vendor due diligence and a disclosure set you'd need to review. The other is to decide not to offer them for now and prepare branch staff for the question, because parents of children born from 2025 onward are likely to ask where to open one. A clear, polite "we don't offer these yet" is fine. A teller improvising an answer about a $1,000 government deposit is not.

If your institution does plan to be a trustee, look hard at the default investment obligation. Picking one, disclosing it and policing the 0.1 percent fee test across fund changes is work that carries on long after the account is opened. The comment period is open until 20 October if you think the trustee burden is set in the wrong place.