We have previously written on the rules and limits of Trump Savings Accounts. It has become quickly apparent that people, even low income families if they have the disposable income, would be better off contributing to a 529 Plan or, when the child works, to a Roth IRA.
Contributions are not tax deductible and any withdrawals before age 59 1/2 are taxable.
If the government is going to fund $1000, if you apply for it, to newborn children within a limited time period to advance one individual's political advertising, you should take advantage of it, but that amount alone will only grow to about $5800 by age 18.
How may low income families are going to go to a brokerage where no one who makes their living selling has any time to place them in an indexed fund with an expense not above .1%? How many low income families would go on line or call to a fund provider like Fidelity or Vanguard to set up a Trump Account?
The efforts by the Administration to cajole business leaders, wealthy individuals, and other organizations who want to stay or be in the good graces of a current president to make contributions to other people's Trump Saving Accounts is consistent with political corruption.
It is totally inappropriate for a current President to attach their name to any government program, government building, government check, or banner hanging on a government building or property in a republican constitutional democracy. The President is not the Government. It is illegal government subsidized political advertising.
Morningstar has a concise article on the 6 reasons a Trump Savings Account is not an efficient investment vehicle.
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