Bank of New York Mellon and the brokerage Robinhood will work with the federal government to implement the so-called Trump accounts, a tax-sheltered savings system for children, the Treasury Department said on Monday.
The new accounts were created last year as part of President Trump’s signature domestic spending bill and will start accepting deposits in July. Four million children have been enrolled so far, according to the Internal Revenue Service, and around one million of them qualify for a $1,000 seed contribution from the federal government.
Bank of New York Mellon, a New York-based regional bank that brands itself as BNY, will be the designated financial agent handling management of the initial accounts. BNY has the world’s largest custodian banking business, holding $60 trillion in assets for pension funds, insurers and other institutions.
Robinhood, the fast-growing financial technology company, will serve as the accounts’ brokerage and initial trustee and help design of the accounts’ app.
Both companies were among the dozens of employers that previously announced plans to seed some Trump accounts with contributions for their workers’ children.
“We’re helping our employees give their children a head start toward a stronger financial future,” Robin Vince, the bank’s chief executive, said in December.
Investment Company Institute, an asset management trade group, has asked the government to make the accounts portable and to let financial companies create a “robust and competitive marketplace” for account trustees and custodians. The government has said that it intends to eventually expand the program to make the accounts transferable.
The National Design Studio, a new White House agency charged with modernizing the government’s apps and websites, will work with Robinhood to design the new Trump accounts app. Robinhood has emerged as a major player in low-commission, online trading of stocks and crypto.
The Trump accounts are intended to be savings and investment vehicles, with some similarities to tax-advantaged retirement accounts. Parents, relatives, employers and other organizations and individuals will be able to make contributions on a child’s behalf, subject to annual limits. The money will generally remain locked until the child turns 18.
Michael Dell of Dell Technologies and his wife, Susan Dell, donated more than $6 billion to help seed accounts for 25 million children who live in ZIP codes where the median household income is below $150,000. The Dells are depositing $250 in each child’s account.
The government plans to give $1,000 to children born between Jan. 1, 2025, and Dec. 31, 2028, who are U.S. citizens and have a Social Security number.
Stacy Cowley is a Times business reporter who writes about a broad array of topics related to consumer finance, including student debt, the banking industry and small business.
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