Investment accounts for kids can help give your child a financial head start
Investment accounts for kids can help give your child a financial head start
Trump accounts (also known as “530A accounts”) are government-created retirement accounts for children, established under legislation passed on July 4, 2025 (known as the “One Big Beautiful Bill”). Parents are expected to be able to open accounts beginning July 4, 2026, and begin contributing on July 5, 2026.
As part of a pilot program, children born between 2025 and 2028 are eligible to receive a $1,000 government contribution when an account is opened. These accounts are new and still evolving, so it's important for parents to understand how they work.
These accounts are new and still evolving, so it's important for parents to understand how they work.
A Trump account may make sense for:
Restricted access is what most clearly sets Trump Accounts apart from UGMA accounts, which allow custodians to use funds earlier for a child’s benefit.
A UGMA (“Uniform Gifts to Minors Act”) account is a custodial investment account where an adult manages assets gifted to a child until the child reaches the age of majority and gains full control. Fabric by Gerber Life offers a kids investment account that is a UGMA account.
UGMA accounts offer flexibility for families who expect to use savings earlier—for education, extracurricular activities, or other child-related costs. The child does not have to be over 18 years old for the custodian to withdraw money from the account.¹
Withdrawals by custodian before age 18 for child expenses:
Flexibility when child reaches adulthood:
Investment flexibility (bonds, international, alternatives):
$1,000 government contribution:
² Source: https://www.trumpaccounts.gov/
Yes. Many families may benefit from using both.
For children born after December 31, 2024 and before January 1, 2029, it may be beneficial to:
For many families, a UGMA can serve as the primary, flexible investment account, while a Trump account will function as a supplemental, long-term layer of savings. The two accounts serve very different purposes.
A Trump account is worth opening for children born 2025-2028 to capture the government’s $1,000 contribution. A UGMA, like the kids investment account offered by Fabric, helps give families flexibility, control, and a way to invest for a child’s needs along the way.
For many families, using both accounts together may provide the best balance: long-term, tax-advantaged growth paired with flexible investing that supports your child throughout childhood and early adulthood.
Fabric by Gerber Life currently offers UGMA/UTMA custodial accounts and does not offer Trump Accounts. This comparison is for educational purposes only.
¹ Custodian can make withdrawals and use the funds for any purpose that directly benefits the account holder (the minor). Once the account transfers to the account holder, they may use funds for any purpose.
Fabric exists to help young families master their money. Our articles abide by strict editorial standards.
Information provided is general and educational in nature, is not financial advice, and all products or services discussed may not be offered by Fabric by Gerber Life (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Consult an attorney or tax advisor regarding your specific legal or tax situation. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. The views and opinions of third-party content providers are solely those of the author and not Fabric by Gerber Life.
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