$1,000 Baby Bonus Explained: Who Qualifies And How To Get It

resident Donald Trump’s new Big Beautiful Bill aims to set children up for financial success by offering a new savings account called the “Trump Account.” The federal government will provide a $1,000 bonus for every U.S. citizen born in 2025 and through 2028.

So, What Exactly Is This $1,000 Bonus?

It’s a one-time payment from the government automatically put into this special savings account for your baby. Think of it as a starter fund meant to grow over time, like a 529 plan, but with more ways you can use the money later.

Who Gets It?

Children born after December 31, 2024, and before January 1, 2029,(as U.S. citizens with Social Security numbers) qualify. Some families may be automatically enrolled if the IRS creates an account on their child’s behalf using tax records. If not, parents or guardians will need to apply to open a Trump Account to trigger the $1,000 government contribution.

How Does This Trump Account Work?

• Up to $5,000 a year can be contributed to the account.
• Employer contributions have a separate $2,500 limit.
• Contributions from parents aren’t tax-deductible, so don’t expect a tax break for putting money in.
• The money grows tax-deferred. That means you don’t owe taxes on any earnings while they are in the account.
• Generally, withdrawals are permitted once the owner turns 18.

How Should Parents Use It?

Don’t think of this as a quick payout—it’s a jumpstart on a long-term savings tool. The earlier you add to it, the more it can grow with compounding. Use it alongside other savings plans, like a 529 or a custodial account, to give your kid a solid financial foundation.

What Other Savings Accounts Should I Use?

While the new baby bonus provides a valuable foundation for your child’s financial future, there are additional steps you can take to support their long-term financial journey. Opening a high-yield savings account is an excellent first step, as interest can accumulate over time, helping to grow funds throughout your child’s upbringing. Certificates of deposit (CDs) are a solid option—but given that you’re required to hold your funds in them for a specific amount of time, they offer less flexibility with liquidity.

Here are some savings account options to consider:

• Capital One 360 Performance Savings Account™: An easy way to save and grow your money with a competitive interest rate. There are no monthly maintenance fees or minimum balance requirements, and you can simply access the account via an app.
• American Express® High Yield Savings Account: This option also offers a competitive interest rate with daily compounding interest. This account is designed to help you save, so there aren’t many withdrawal or ATM options, so this account is best for those who are committed to letting their funds sit and grow.
• Synchrony Bank Certificates of Deposit: These CDs offer three-year and five-year terms to maximize your earnings without a minimum deposit requirement. They’re a good choice for savers who want to avoid minimum balance requirements and are comfortable locking their cash away for several years in return for a competitive APY.

A Few Things to Keep in Mind

Since this program just started, some details might change as the government works out the logistics. Also, the bonus amount is universal, meaning there’s no extra help if you’re on a lower income, and it comes as part of a bigger bill that changes programs like Medicaid and SNAP.

Bottom Line

The Big Beautiful Bill’s $1,000 baby bonus aims to encourage families to save early for their kids. It’s not just free money, but a financial tool intended to help build wealth over time.

---