Treasury Limits Trump Account Investments to Low-Fee Funds

The United States Department of the Treasury and the Internal Revenue Service issued proposed regulations on August 20, 2026, to restrict eligible investments for Trump Accounts. These tax-deferred savings vehicles, established under the One Big Beautiful Bill Act for children under 18, are now subject to rules limiting investments during the growth period—from account opening until age 17—to mutual funds or ETFs that track equity indices of primarily U.S. companies.

To protect beneficiaries, the proposed rules require these funds to avoid leverage and maintain annual fees and expenses at or below 0.1%. The regulations explicitly disqualify ESG-linked funds, which the Treasury characterized as similar to sector-specific funds. The State Street SPDR Portfolio S&P 500 ETF has been designated as the default investment option.

As of late July, 7 million accounts have been established, including 1 million newborns who received $1,000 in federal seed money. Treasury Secretary Scott Bessent described the regulations as simple, commonsense protections for families. IRS CEO Frank Bisignano stated the rules provide clarity for trustees and beneficiaries, encouraging the use of low-fee options to maximize compound earnings over several decades. Public comments on the proposal are open until October 20, 2026.