Overview
- The program will begin accepting deposits on Saturday, July 4, and the Treasury says about six million children are already signed up for accounts.
- Children born between Jan. 1, 2025, and Dec. 31, 2028 who open an account will receive a $1,000 Treasury contribution and philanthropies and some companies have pledged additional matches for other children.
- Individuals may contribute up to $5,000 per child each year and employers may add up to $2,500 that counts toward that $5,000 limit.
- During the growth period, funds must be invested in a narrow menu of index mutual funds or ETFs chosen by Treasury and annual fees are capped at roughly 0.10 percent.
- Accounts are custodial 530A vehicles that lock money until the calendar year the beneficiary turns 18, convert to IRA-style rules at adulthood, and carry ordinary tax treatment plus a 10 percent penalty for unqualified withdrawals before age 59½.