Money Accounts for Kids: A New Investment Account for Every American Child

In early 2025, a proposal emerged from Washington that cut across partisan lines in an unexpected way: give every newborn American child an investment account funded with $1,000 of government money. Known formally as Child Investment Accounts — and sometimes called "baby bonds" — the concept is rooted in the idea that wealth-building should start at birth, not at a first paycheck.

Here's what we know about the proposal, who's backing it, and what the math says about what $1,000 could become by the time a child turns 21.

The Proposal: What Are Child Investment Accounts?

The Child Investment Account proposal, included as the "Money Account for Kids" provision in the "One Big Beautiful Bill" working its way through Congress in early 2025, would create a government-funded investment account for every American child. The key features as proposed:

• $1,000 initial deposit from the federal government for every child born in the United States (or newly naturalized)
• The money would be invested and grow tax-free until the child reaches adulthood
• Funds could be used for education, homeownership, or retirement savings upon reaching age 18 or 21 (details still being finalized)
• Additional contributions from parents, family members, or employers may be permitted

The concept draws from "baby bonds" proposals that have been discussed in various forms for years. Senator Cory Booker introduced the American Opportunity Accounts Act in 2019, which proposed $1,000 at birth with annual supplements up to $2,000 for lower-income families. Senator Chuck Schumer and others have backed similar ideas. The current proposal has bipartisan support and has been championed by the administration as a wealth-building initiative for all American families, regardless of income.

Michael Dell's Billion-Dollar Commitment

One of the most notable private-sector endorsements came from Michael Dell, the founder of Dell Technologies and one of America's wealthiest individuals (net worth approximately $110 billion). Dell announced a commitment of $1 billion to support these child investment accounts through the Michael & Susan Dell Foundation.

Dell framed the investment as an opportunity to "give every American child a stake in the economy from day one." The foundation's contribution would supplement the government's $1,000 deposit for eligible children, though the exact mechanics — whether it adds to individual accounts or funds program infrastructure — are still being worked out.

Dell isn't alone. The initiative has attracted interest from several major corporations and philanthropic organizations.

Companies Donating to Employees' Children

Several large employers have announced or are considering programs to contribute to child investment accounts for employees' children:

• Dell Technologies: Announced plans to contribute to accounts for children of Dell employees, in addition to the foundation's broader $1 billion commitment
• Amazon: Reportedly exploring a program to seed accounts for warehouse and fulfillment center employees' newborns as part of its benefits package
• JPMorgan Chase: CEO Jamie Dimon has expressed support for the concept and indicated the bank may offer matching contributions for employees
• Walmart: Has discussed incorporating child account contributions into its employee benefits, potentially including part-time workers

These corporate programs would be voluntary and would function similarly to employer 401(k) matching — a benefit that helps with recruitment and retention while building employee loyalty.

How to Sign Up

As of early 2025, the child investment account program has not been fully enacted into law. The proposal is part of ongoing legislative negotiations. However, here's what to expect:

1. When legislation passes: The Treasury Department or a designated agency will establish the program infrastructure
2. Automatic enrollment is likely: The proposal calls for accounts to be created automatically at birth, linked to Social Security numbers — similar to how Social Security numbers are assigned at the hospital
3. Online portal: Parents will likely manage accounts through a government website (similar to how you manage student loans through StudentAid.gov)
4. Investment options: The accounts will likely offer simple, low-cost investment options — probably broad market index funds similar to the Thrift Savings Plan (TSP) used by federal employees

To prepare now:

• Ensure your child has a Social Security number (applied for at birth)
• Watch for announcements from the Treasury Department or IRS
• Check with your employer about any corporate matching programs
• If your employer is participating, ask HR about enrollment procedures

The Math: What $1,000 Could Become

Here's where things get exciting. The power of compound growth over 21 years is remarkable, even starting from a modest amount.

Assuming the $1,000 is invested in a broad stock market index fund:

Historical Average Returns

The S&P 500 has returned approximately 10.5% annually on average over the past 50 years (before inflation). After inflation, that's roughly 7.5%. Using these as guideposts:

With Additional Contributions

The real power comes from adding to the account over time. If parents or grandparents contribute just $50 per month ($600/year) in addition to the initial $1,000:

The compound growth formula:

Future Value = P(1 + r)^n + PMT × [((1 + r)^n - 1) / r]

Where:
P = initial principal ($1,000)
r = annual return rate (as decimal)
n = number of years (21)
PMT = annual additional contribution

A Generation of Investors

Consider the scale: approximately 3.6 million babies are born in the U.S. each year. At $1,000 each, the annual government cost would be roughly $3.6 billion — less than 0.05% of the federal budget.

If those 3.6 million accounts averaged $30,000 each by the time the children turn 21, that generation would collectively hold $108 billion in investment assets. This creates a generation of Americans who enter adulthood as investors and asset owners, not just earners and spenders.

How It Compares to Existing Options

Child Investment Accounts would join a landscape of existing options:

Criticisms and Open Questions

The proposal isn't without skeptics:

• Cost concerns: $3.6 billion per year is modest by federal standards, but critics ask whether it's the best use of funds when Social Security and Medicare face funding shortfalls
• Investment risk: Market downturns could reduce account values. A child born in 2007 would have seen their account drop roughly 50% within two years
• Implementation complexity: Creating 3.6 million new accounts per year requires significant infrastructure
• Withdrawal rules: If funds can be withdrawn at 18, some worry they'll be spent on non-wealth-building purchases
• Political durability: Will future administrations continue funding the program?

The Bottom Line

Whether you call them "child investment accounts," "baby bonds," or "Money Accounts for Kids," the core idea has broad intuitive appeal: give every child a financial head start and let compound growth do the work. A $1,000 investment at birth, left to grow for 21 years, could provide a meaningful foundation for education, a first home, or a jump-start on retirement savings.

The legislative details are still being finalized. In the meantime, parents who want to give their children a similar advantage can open a 529 plan, custodial Roth IRA (if the child has earned income), or UTMA/UGMA account today. Track your own savings contributions and investment accounts with our Savings & Contributions planner.

This article reflects the Child Investment Account proposal as of early 2025. Legislative details may change. Check congress.gov for the latest status of the "One Big Beautiful Bill."