Saving for a child’s future can feel a little like losing weight and getting physically fit — something everyone talks about but few accomplish. In today’s economy, many Vermonters struggle just to pay their bills, never mind squirreling money away for their kids’ futures.
Two new government investment programs, one created by the federal government and the other by the state, aim to break that cycle by helping parents and caregivers jump-start kids’ savings while promoting smart investment habits.
Trump Accounts
The One Big Beautiful Bill Act passed by the U.S. Congress and signed into law by President Donald Trump last year created a new savings and investment tool for families called 530A accounts, aka Trump Accounts. Any child under the age of 18 who is a U.S. citizen and has a Social Security number is eligible for one, regardless of how their parents may feel about the president.
Babies born between January 1, 2025, and December 31, 2028, also qualify to receive a $1,000 contribution from the U.S. government — and potentially more from other contributors such as employers, charitable organizations and private philanthropies. For instance, Susan and Michael Dell, of Dell Technologies fame, have pledged to contribute an additional $250 per child to 25 million children — $6.25 billion total. To qualify, children need to be under the age of 10 and live in zip codes where the median income is below $150,000. Nearly all Vermont cities and towns meet that criterion.
A Trump Account is essentially a cross between an individual retirement account, or IRA, and a 529 savings account. Parents, relatives and friends can make after-tax contributions to the account of as much as $5,000 per year, enabling potential earnings to grow tax-free. Like an IRA, a Trump Account is held in the child’s name, with the parents or guardians its sole custodians until the child turns 18. With a few exceptions, the child cannot withdraw those funds before then.
As of February, about 3 million children were signed up for Trump Accounts, according to the U.S. Treasury, but the $1,000 federal contributions won’t take place until July 5.
Though the U.S. Treasury has provided few details about where those funds will be invested beyond “broad equity investment funds,” the potential for earnings is significant. According to Invest America, a $1,000 investment at birth is expected to grow to $3,648 by age 5, $10,667 by age 12 and $22,466 by age 18.
You can sign your children up for an account by filing form 4547 with your 2025 tax return.
Vermont Baby Bonds
Later this year, the Vermont Office of the State Treasurer will launch a pilot project aimed at reducing poverty and helping newborns and their families get a financial leg up in life.
First Steps Forward is a three-part financial-assistance program created by state Treasurer Mike Pieciak. The pilot project, which kicks off in Essex, Orleans and Caledonia counties and could later expand statewide, includes what are called Baby Bonds for children born into low-income families.
Here’s how they work: Despite the name, Baby Bonds are not government-issued securities. Rather, each eligible child receives $3,200 to be invested collectively in the stock market by the treasurer’s office and grow over time. The child will be able to withdraw that money anytime between the ages of 18 and 30 for the purposes of buying a house in Vermont, starting or investing in a Vermont business, or attending a college or trade school. Based on historical stock market data that assume a 10 percent annual yield, a $3,200 investment today would be worth $17,800 in 18 years.
To be eligible, a child must be born to Vermont parents, live in the state and meet the financial criteria for receiving Medicaid. “We see this as an opportunity to break the generational cycle of poverty and also invest in our workforce,” Pieciak said, noting that a disproportionate number of children in rural areas of the state are born into poverty. “It’s also a retention tool to keep young people in Vermont.”
Additionally, First Steps Forward will make direct cash payments of $500 per month to each eligible family throughout the baby’s first year of life. Pieciak explained that the goal is to foster families’ financial security, reducing parents’ anxiety during that first stressful year and creating a healthier home environment.
The program will also provide parents with free diapers and other newborn necessities, many of which are the most costly parts of becoming new parents. Finally, First Steps Forward will unveil a maternal mental health program aimed at reducing the likelihood of postpartum depression in new mothers.
The pilot project, which Pieciak expects to go live by year’s end, will cost about $4.5 million for the first three years, with foundations and private donors footing the entire bill. If and when the Vermont legislature decides to take the program statewide for all babies born into poverty, a Baby Bond program that gives a collective $6 million to children would be worth about $22 million by the time those kids are old enough to spend it.
The original print version of this article was headlined “Investing in Futures | Trump Accounts and Baby Bonds give kids golden nest eggs”
This article appears in Kids VT Money Issue • 2026.
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