By Jeanne Sahadi, John Towfighi, CNN

(CNN) — President Donald Trump on Tuesday formally introduced his ‘Trump Account” program with a twist: A multibillion-dollar donation from Michael and Susan Dell would expand the program’s eligibility to more children.

The investment accounts could help tens of millions of American families save for their children. But critics argue they don’t go far enough to solve America’s savings problem.

Here’s what you need to know.

What are Trump Accounts?

The federal government will put $1,000 into individual accounts for children born between January 1, 2025, and December 31, 2028.

The family and others may make annual contributions to the account starting on July 4, 2026, so long as combined they don’t exceed $5,000 a year, although nonprofits may be able to donate more. Employers can contribute up to $2,500 of that amount.

The money must be invested in a low-cost, diversified US stock index fund or equivalent.

Who is eligible?

To be eligible, the baby must be a US-born citizen, and both parents plus the baby must have Social Security numbers.

How can I open one?

Parents and guardians will be able to file a new online form with the IRS (Form 4547) to establish a “Trump Account” for their child.

Starting in May 2026, the Treasury Department will follow up with those who filed to complete the process of opening an account.

How does the Dell fund work?

The Dells’ gift will fund $250 for many children ages 10 and under who were born before January 2025, expanding the number of children receiving funding to start an account.

Eligible children live in ZIP codes where the median income is less than $150,000. The gift is expected to reach children across 75% of US postal codes, according to Invest America, the nonprofit organization spearheading the initiative.

If there are additional funds remaining after initial sign-ups, children older than 10 may be eligible. The Dells expect the investment accounts will be available to at least 25 million children.

The Dells’ funds will be distributed to individual accounts by the Treasury Department.

When can I take the money out?

No withdrawals may be made until the child turns 18. Taxes are deferred on growth until the money is withdrawn.

The account is intended for expenses tied to higher education or “post-secondary education credentialing,” buying a home or starting a small business.

What are the pros and cons?

Proponents gave the program strong marks for its universality and limited hoops to jump through for enrollment. It also gives every American child a bit more financial security.

But critics note it’s a regressive benefit, giving everyone money regardless of need.

Although parents may welcome the prospect of “free money,” as a savings vehicle, the “Trump Accounts” add yet more complexity to an already complex web of savings accounts options for families — each with their own eligibility and withdrawal rules, contribution limits and tax treatment.

The Tax Foundation said existing 529 accounts offer more flexibility and tax benefits than the “Trump Accounts.”

The-CNN-Wire
™ & © 2025 Cable News Network, Inc., a Warner Bros. Discovery Company. All rights reserved.