01 Aug How does the new baby bond program work?

Q. My daughter is having a baby. I heard that President Trump is starting some kind of baby bond program but I don’t know how it would work. Can I choose how to invest that money or does it have to stay with the government? Or will they send her a check?
— Grandma-to-be

A. Saving early for children is important.

There’s still a lot we don’t know, but here’s what’s out there.

First, from the so-called “Big Beautiful Bill,” there will be established a $1,000 tax-deferred investment account for every child born between Jan. 1 of this year until Dec. 31 of 2028, said Jody D’Agostini, a certified financial planner with The Falcon Financial Group in Morristown.

They’re being called “Trump Accounts.”

“All U.S. citizen newborns qualify if the child and one parent have Social Security numbers,” D’Agostini said. “The accounts accept contributions of up to $5,000 (indexed) per year.”

You can withdraw the money at age 18 for up to one half of the balance. It will be taxed at ordinary income rates, she said.

You can also add more contributions to the account over time.

“The purpose is to establish early investing habits and knowledge, and to create wealth,” she said.

But the exact details — such as how they would be opened and funded — hasn’t yet been released by the Treasury Department.

But we do know the money is required to be invested in index funds or exchange-traded funds that track the S&P 500.

More to come on this one, for sure.

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This story was originally published in August 2025.

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