Treasury Launches Low-Cost Index Funds for Trump Accounts to Boost Children’s Future Savings

The department unveiled a default investment in S&P 500 ETF ahead of its Independence Day launch.

Treasury Secretary Scott Bessent speaks at Rustico restaurant during a stop on the “Trump Accounts Tour” in Westlake Village, Calif., on May 29, 2026. Mario Tama/Getty Images

The U.S. Department of the Treasury on Wednesday outlined investment options for Trump Accounts, a new federal program to help families invest in their children’s long-term financial security with low-cost stock market funds.

All contributions to the accounts will, upon launch, go into the State Street SPDR Portfolio S&P 500 ETF (SPYM), a fund chosen for its exposure to the U.S. stock market and expenses far below statutory limits, the department said. Additional index fund selections will be made public in the coming months.

The announcement represents a step in the Trump Accounts initiative, which offers tax-advantaged investment vehicles seeded with government contributions to promote saving for the next generation. The program is a part of the nation’s 250th anniversary celebrations.

“Treasury has also selected the following additional low-cost index ETFs for the Trump Accounts investment lineup,” the department said in a statement.

The options include the iShares Core S&P 500 ETF (IVV), Vanguard Total Stock Market ETF (VTI), State Street SPDR Portfolio S&P 1500 Composite Stock Market ETF (SPTM), and iShares Core S&P Total U.S. Stock Market ETF (ITOT).

These funds were selected to offer diversified exposure across major market segments while maintaining low costs, according to Treasury officials. Until parents or guardians can choose alternatives, the SPYM will be the default.

Millions of children have already been signed up. The Treasury deposited $1,000 seed money into eligible accounts for newborns in a pilot phase. Families can contribute up to $5,000 annually, with investments growing tax-deferred. California has opted not to treat the accounts as tax-deferred for state tax purposes.

‘Generational Down Payment’

President Donald Trump and Treasury Secretary Scott Bessent have framed it as a “generational down payment on the American dream,” with the app-based platform designed to simplify access for families.

The Treasury Department will announce when investment selection functionality becomes available, ensuring changes to allocations are made.

The rollout comes amid expanded eligibility efforts, including extensions to children in foster care, as announced in June. Private sector involvement, including contributions from Dell CEO Michael Dell and his wife, Susan Dell, has further seeded accounts for millions of eligible children.

The S&P 500-focused program offers exposure to large U.S. companies, while broader total market options include small- and mid-cap segments. Full contributions are set to launch on July 4.

The accounts are restricted to U.S. citizens. They build on prior guidance from the IRS and the Treasury Department. Withdrawal rules are similar to those of other tax-advantaged savings vehicles, with funds intended mainly for future use by the child.