Robinhood Markets (NASDAQ:HOOD) and BNY (NYSE:BK) have won the Trump Accounts contract to build and manage the tax-deferred investing accounts for children, with over 4 million kids already signed up as of March 31.

The Contract Winners

The U.S. Department of the Treasury announced Monday that BNY will serve as the designated financial agent to manage the initial accounts. 

BNY partnered with Robinhood to develop the Trump Accounts app and provide customer service, launching July 4.

“Our task is clear: to provide the next generation of Americans with a world-class, intuitive platform to jump-start their financial future,” said Vlad Tenev, Robinhood’s chairman and CEO.

The app will be a custom white-label product for Treasury without BNY or Robinhood branding. 

Moreover, the company did not disclose the contract's financial terms. Wall Street firms have pursued roles in the program since its announcement, seeing the accounts as a gateway to lifelong customers.

The Account Details

The tax-deferred investing accounts for children include a one-time $1,000 deposit from the Treasury for kids born between 2025 and 2028. 

All children with a Social Security number can have an account, but only those born between 2025 and 2028 who are U.S. citizens qualify for the $1,000 seed money.

As of March 31, taxpayers had signed up more than 4 million children for Trump accounts, and more than 1 million were eligible for the Treasury’s $1,000 pilot program contribution.

Meanwhile, parents or guardians can enroll by filing IRS Form 4547 with their 2025 tax returns or via TrumpAccounts.gov. 

The company will roll out the authentication process in May, and it will deliver the seed money on July 4.

The Contribution Limits

Parents, guardians, friends, and others can contribute up to $5,000 annually in after-tax dollars to Trump accounts. 

As part of the $5,000 limit, companies can deposit up to $2,500 pretax yearly for kids of employees. The limit is indexed for inflation after 2027.

BNY, along with several other large employers, previously pledged to match the Treasury’s $1,000 seed money for children of U.S. employees. 

Philanthropists in multiple states have also committed to seed the accounts of certain qualifying families.

The Investment Rules

The accounts must be invested in index funds of mostly U.S. stocks until age 18, when children can first take distributions. 

Funds must have an expense ratio of 0.1% or less. In the year the child turns 18, the account starts following tax rules for individual retirement accounts.

Treasury will retain control over the app and operations for these initial accounts. 

Within a year, people will be able to roll over the accounts to other financial institutions, helping those who want to consolidate at one brokerage and opening the door to different investment lineups.

Image: Shutterstock