Bank of America to Match Government Contribution for Child Savings Accounts
In a memo shared with employees on Wednesday, Bank of America announced it will match the U.S. government’s $1,000 contribution to Trump’s new account for eligible staff members.
The bank will also enable employees to contribute pre-tax funds to these child savings accounts directly through payroll deductions, based on details revealed in the memo.
Effective July 4, a recent initiative linked to President Trump’s One Big Beautiful Bill Act will permit parents to set up tax-advantaged investment accounts for children under 18 who possess Social Security numbers.
For kids born between 2025 and 2028, the U.S. Treasury will initially fund these accounts with $1,000.
Bank of America expressed support for the federal effort, stating, “We applaud the federal government for providing innovative solutions to help employees and families plan for their futures and welcome the opportunity to participate,” as noted in the memo.
Earlier this year, the bank revealed plans to distribute nearly $1 billion worth of stock to its employees, excluding senior executives. This translates to about 19 million shares of Bank of America.
The government intends to invest funds in the Trump account into a low-cost index fund, though it’s worth noting that these accounts don’t offer the same tax advantages as 529 accounts or Roth IRAs.
Withdrawals from this account are restricted until the child reaches 18, after which the funds are moved to an IRA, making withdrawals taxable.
Interestingly, the Republican tax and spending legislation aims to foster substantial contributions from corporations and philanthropists to investment accounts, which is somewhat more flexible than previous regulations.
Under this new bill, contributions are capped at $5,000 annually, with employer allowances set at $2,500 each year.
In a notable collaboration, Nicki Minaj, the rap star, plans to donate between $150,000 and $300,000 to help fans from “Burbs” establish their accounts, even joining President Trump at a summit to promote this program.
In December, Michael and Susan Dell pledged a remarkable $6.25 billion to this initiative, benefitting 25 million children in the U.S., which amounts to about $250 per account. Additionally, Dell Technologies announced a $1,000 grant from the U.S. Treasury for newborns of U.S. employees.
