by Austin Boyce, Advisor, CFP®

March Madness is right around the corner. As players prepare for their opponents, coaches study matchups and build game plans long before tip-off.

In 2026, families will have a new financial “team” to consider adding to their own tournament bracket: the 530A savings account, sometimes referred to in media coverage as a “Trump account.”

While there may not be 68 savings account options like there are teams in the NCAA tournament, there are enough contenders to make choosing the right one a strategic decision. Let’s review the scouting report.

530A Account Features

Officially launching July 5, 530A accounts can be opened for any child under 18 with a valid Social Security number. Not every feature of the account has been finalized yet, but several key details are known:

Up to $5,000 can be contributed per year.
For children born between 2025 and 2028, the government contributes $1,000 to prime the pump.
Some philanthropists and companies have announced plans to add funding based on criteria such as median household income by zip code.

Contributions are made with after-tax dollars, meaning there is no tax benefit in the year the contribution is made. The money then grows tax-deferred, like a retirement account.

When funds are eventually withdrawn, earnings are taxed as ordinary income, similar to a Traditional IRA. However, unlike Traditional IRAs, there’s no upfront tax break on contributions, which limits the tax efficiency of these accounts.

Investment Options

While final details are still being finalized, current information suggests investments in 530A accounts will focus on American companies. This could limit the opportunity to build a globally diversified portfolio.

Account Control

Because these accounts are designed for minors, there are restrictions on when funds can be accessed.

At age 18, control transfers fully to the child.
Withdrawals follow Traditional IRA-style rules.
If funds are withdrawn before age 59½, taxes and penalties generally apply unless used for qualified expenses such as education or a first-time home purchase.

Predicting how a young child will manage money at age 18 is nearly impossible. Given the possibility that the account could grow to a sizable amount, giving up that control as a parent is an important factor to consider when evaluating savings vehicles.

How Does It Stack Up Against Other Accounts?

The 530A account doesn’t perfectly mirror any existing option. It’s a hybrid account between a custodial Roth, a brokerage account, and a Traditional IRA.

Like a custodial Roth IRA or brokerage account, contributions are after-tax.
Like a Traditional IRA, earnings are taxed as ordinary income upon withdrawal.

Because Roth IRAs and brokerage accounts are also funded with after-tax dollars, they may offer more efficient savings opportunities:

Qualified withdrawals from Roth IRAs are tax-free.
Brokerage accounts benefit from capital gains tax rates.
Custodial Roth IRAs do require earned income from the child, a key eligibility rule that brokerage and 530A accounts don’t have.

Every account has strengths and weaknesses. Some have better tax efficiency. Others have fewer eligibility restrictions. The key is knowing which option best fits your family’s situation.

Calling the Right Play

The 530A account is a creative new way to help jump-start long-term savings for kids. For some families, it may be a strong contender; for others, an existing strategy may still be the best option.

There’s no single account that fits every family situation. That’s why having a thoughtful discussion with your advisor matters. Just like a seasoned coach studies matchups before tip-off, an advisor evaluates your full financial picture. With the right preparation and decision-making, you can help young people in your life achieve long-term financial success. 🏀