By Lauren Schwahn, NerdWallet

The investing information provided on this page is for educational purposes only. NerdWallet, Inc. does not offer advisory or brokerage services, nor does it recommend or advise investors to buy or sell particular stocks, securities or other investments.

President Donald Trump’s “one big, beautiful bill” is launching a new way to save for children’s futures: the “Trump Account.” This investment account gives kids who meet certain requirements $1,000 courtesy of the federal government.

But a Trump Account may not be a superior replacement for existing investment tools just yet.

What is a Trump Account?

Formerly called “Money Accounts for Growth and Advancement,” or “MAGA accounts,” the Trump Account is a special trust designed to give children a head start financially. Money contributed to these accounts gets invested in the stock market.

The Trump Accounts Contribution Pilot Program starts eligible kids off with a one-time $1,000 credit. The money comes from the Department of the Treasury.

Who qualifies?

Not every kid can get a Trump Account. To be eligible for the $1,000 credit under the pilot program, children must:

Be born between Jan. 1, 2025, and Dec. 31, 2028.
Be a U.S. citizen.
Have a Social Security number.

How do Trump Accounts work?

Getting started

Under the pilot program, the Treasury will set up accounts for qualifying kids if their parents haven’t already done so. Parents aren’t required to make an election.

How do contributions and withdrawals work?

Trump Accounts come with some restrictions. Contributions made before the calendar year in which the beneficiary turns 18 are limited to $5,000 per year. Employers can contribute up to $2,500 to accounts, which won’t count as income for the parents or children.

Trump Account distributions aren’t allowed before the first day of the calendar year the child turns 18.

Contributions made after the child’s 18th year generally follow traditional IRA rules. The IRA contribution limit in 2025 is $7,000 for those under age 50. The money invested grows tax-deferred, and withdrawals are taxed as ordinary income.

There’s a 10% penalty for withdrawing money from an IRA before age 59 ½, unless there’s a qualifying exception, such as homebuying, or paying for higher education expenses.

What about taxes?

Contributions made to Trump Accounts before the child’s 18th birth year must be made with after-tax dollars, which means no tax deduction for parents or employers, said Jacob Martin, a certified financial planner in Columbus, Ohio, in an email interview.

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Contributions made during the 18th birth year and after could be deductible.

How do they compare with existing investment vehicles?

Trump Accounts have perks, but there are other long-term investment and college savings strategies that bring more to the table, financial experts say. Let’s explore a couple of options further.

Trump Accounts resemble traditional IRAs, except contributions made before the beneficiary’s 18th birth year aren’t deductible and have a lower annual cap. Unlike an IRA, there’s no earned income requirement to start.

Brokerage accounts, including UTMA & UGMA custodial accounts, don’t have contribution or withdrawal limits.

A 529 plan offers more flexibility than a Trump Account when it comes to who can open an account and use the money. For example, account holders can change beneficiaries, or roll funds from one family member’s plan to another.

While the exact amount varies by state, contribution limits for 529 education savings plans are high. Contributions grow tax-free, and withdrawals are tax-free when made for qualifying expenses. Some plans offer state residents tax deductions. You can also roll over unused money, up to a certain amount, into a Roth IRA.

Is a Trump Account worth it?

If your child can get the $1,000 credit, consider it, Robert Persichitte, a CFP in Arvada, Colorado, said in an email interview.

“If it’s free money, great. Take what you can get,” he said.

A Trump Account gives children the ability to start investing early with a little seed money. It could help establish a fund your kid could put toward buying a home or starting a business someday.

But for most taxpayers, Roth IRAs and 529 accounts are likely the better options because they offer much better tax savings, Persichitte said.

Other investment accounts, including IRAs, 529s and other custodial accounts, also allow higher contribution limits, which could help you save a larger amount over the long term.

Lauren Schwahn writes for NerdWallet. Email: lschwahn@nerdwallet.com. Twitter: @lauren_schwahn.

The article $1K ‘Trump Accounts’ for Kids: How Do They Stack Up? originally appeared on NerdWallet.

By ELAINE KURTENBACH and MATT OTT, Associated Press Business Writers

Early trading on Wall Street was quietly mixed on Wednesday as markets shift their attention toward a deluge of corporate earnings reports while monitoring ever-changing developments on U.S. trade policy.

Futures for the S&P 500 were flat before the bell, while futures for the Dow industrials rose 0.2% Nasdaq futures were down 0.2%.

Johnson & Johnson rose 1.8% after the drug and medical device giant beat analysts’ sales and profit targets and raised its full-year outlook on both. J&J said it expects “game-changing approvals and submissions” in the second half of 2025 on an array of products in its pipeline.

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Bank of America ticked up less than 1% after it beat Wall Street’s second-quarter profit targets. The bank’s net interest income grew for the fourth straight quarter, but came in slightly lower than expectations.

Goldman Sachs also beat Wall Street’s sales and profit targets on a strong performance from its trading division, which took advantage of market volatility triggered by President Donald Trump’s on-again-off-again tariff announcements this spring. Its shares rose about 1% before markets opened.

Netherlands-based ASML, the world’s leading supplier of chipmaking gear, said in its latest earnings report Wednesday that the impact of Trump’s tariffs on its business was less negative than anticipated, but its shares tumbled more than 7% after the company said it couldn’t guarantee growth next year.

The company makes equipment used in cutting edge semiconductors and one of its key customers is Taiwan Semiconductor Manufacturing Co., or TSMC, a major supplier for Nvidia.

“The level of uncertainty is increasing, mostly due to macroeconomic and geopolitical consideration. And that includes, of course, tariffs,” CEO Christophe Fouquet said.

United Airlines posts its most recent quarterly results after the bell Wednesday.

Also coming Wednesday is the government’s report on producer prices, which measures inflation at the wholesale level.

A report on Tuesday showed that consumer inflation in the United States accelerated to 2.7% last month from 2.4% in May. Economists said higher prices for clothes, toys and other imported goods suggest that Trump’s stiffer tariffs are fueling inflation. That sticky inflation could mean that the Federal Reserve will hold its ground on interest rates, which have remained elevated in recent years after red-hot demand and supply chain breakdowns in the wake of the pandemic sent prices for just about everything skyrocketing.

Wall Street loves lower interest rates because they juice prices higher for stocks and other investments, and Trump himself has been clamoring for the Federal Reserve to cut rates more quickly. But the Fed has been keeping interest rates on hold this year since lower rates can give inflation more fuel while they boost the economy. Fed Chair Jerome Powell has insisted he wants to see more data about how tariffs affect the economy and inflation.

Elsewhere, in Europe at midday Germany’s DAX rose 0.4%, while Britain’s FTSE 100 gained 0.3%. The CAC 40 in Paris was unchanged.

In Asian trading, Tokyo’s Nikkei 225 edged less than 0.1% lower, to 39,663.40. Investors are focusing on the potential impact of an election for the Upper House of Parliament on Sunday that is expected to lead to tax cuts and higher spending as lawmakers try to restore the waning popularity of the ruling Liberal Democrats.

Worries over a deterioration in Japan’s fiscal health have pushed yields of long-term Japanese government bonds to their highest levels in years.

“What’s at stake isn’t simply which party hands out the biggest bundle of goodies. It’s whether the walls holding up Japan’s house of debt can withstand another round of fiscal fireworks…” Stephen Innes of SPI Asset Management said in a commentary.

Elsewhere in Asia, Hong Kong’s Hang Seng shed 0.3% to 24,517.76, while the Shanghai Composite index slipped less than 0.1% to 3,503.78.

South Korea’s Kospi lost 0.9% to 3,186.38 and in Australia, the S&P/ASX 200 declined 0.8% to 8,561.80.

Taiwan’s Taiex jumped 0.9% and India’s Sensex added 0.2%. Thailand’s SET dropped 0.3%.

In Jakarta, shares rose 0.7% after President Donald Trump said on Truth Social that he plans to charge imports from Indonesia a tariff of 19%, while American goods sent to the Southeast Asian country will face no tariffs. Trump also said Indonesia committed to buying U.S. energy, agricultural products and aircraft.

Indonesia’s central bank cut its key interest rate by 0.25 percentage points on Wednesday, to 5.25%.

“We have calculated everything and discussed everything. The most important thing for me is my people, as I must protect the interests of our workers,” Indonesian President Prabowo Subianto told reporters, adding that “this is our offer, and we are not able to give more (to the U.S.).”

In energy trading, U.S. benchmark crude oil shed 79 cents to $65.73 per barrel. Brent crude, the international standard, slipped 67 cents at $68.04 per barrel.

The dollar fell to 148.75 Japanese yen from 148.87 yen. The euro was steady at $1.1601.

By PAUL WISEMAN, Associated Press Economics Writer

WASHINGTON (AP) — U.S. wholesale inflation cooled last month, despite worries that President Donald Trump’s tariffs would push prices higher for goods before they reach consumers.

The Labor Department reported Wednesday that its producer price index was unchanged last month from May after rising 0.3% the previous month. June wholesale prices were up 2.3% from a year earlier, smallest year-over-year gain since September. Both measures came in below what economists had expected.

Excluding volatile food and energy prices, so called core producer prices were also unchanged from May and up 2.6% from June 2024.

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The report on wholesale inflation came a day after the Labor Department reported that consumer prices last month rose 2.7% from June 2024, the biggest year-over-year gain since February, as Trump’s sweeping tariffs pushed up the cost of everything from groceries to appliances.

Consumer prices and producers prices do not always move in tandem.

The producer price report showed that wholesale goods prices rose 0.3% from May, biggest month-over-month increase since February. Steel and iron prices rose

Wholesale prices can offer an early look at where consumer inflation might be headed. Economists also watch it because some of its components, notably measures of health care and financial services, flow into the Federal Reserve’s preferred inflation gauge — the personal consumption expenditures, or PCE, index.

Inflation began to flare up for the first time in decades in 2021, as the economy roared back with unexpected strength from COVID-19 lockdowns. That prompted the Fed to raise its benchmark interest rate 11 times in 2022 and 2023. The higher borrowing costs helped bring inflation down from the peaks it reached in 2022, and last year the Fed felt comfortable enough with the progress to cut rates three times.

But it has turned cautious this year while it waits to see the inflationary impact of Trump’s trade policies. Trump has aggressively stepped up pressure on the Fed to cut rates, a move that threatens the central bank’s independence.

By THALIA BEATY, Associated Press

Two Republican senators and a broad bipartisan coalition of funders and nonprofits prevented a 600% increase in taxes levied on the endowments of the largest private foundations as part of President Donald Trump’s the tax and spending legislation.

Thanks to their support, when Trump signed the bill into law on July 4, taxes went up on the endowments of the largest universities, but not on the endowments of philanthropic foundations.

“I do have to say that this took some persuasion,” said Sen. Todd Young of Indiana in an interview with The Associated Press. The other champion was Sen. James Lankford of Oklahoma, who did not respond to an interview request.

Together, they advocated to remove the provision which, at the high end, would levy a tax of 10% on the investment earnings of foundations with more than $5 billion in assets, up from the current rate of 1.39%.

The move reveals both the power of philanthropic groups, especially conservative ones, to sway legislators and a split in the administration’s coalition between those who want to protect the independence of private philanthropy and those who think the sector supports resistance to the president’s agenda.

Backing of Republican senators and conservative groups was key

Young said he spoke with leaders or representatives of a dozen foundations in his state to understand what it would mean to increase these taxes on foundation endowments.

Though Young didn’t name any specific leaders, Indiana is home to numerous major foundations — including one of America’s largest foundations, the Lilly Endowment, which holds shares in the pharmaceutical company Eli Lilly and reported assets of almost $80 billion at the end of last year. The Associated Press receives funding from the Lilly Endowment for its coverage of philanthropy and religion.

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Young said many in the Republican caucus appreciate the value of the investments private foundations make in their communities.

“Let’s be honest here. The target of this excise tax increase was not the vast majority of private foundations. It was a handful of large foundations that are nationally known that have been accused of embracing and perpetuating certain woke policies and agendas,” Young said.

While he didn’t specify the specific foundations, Young was tapping into a critique of large progressive foundations brought by politicians like Vice President JD Vance. In a 2021 speech at the conservative think tank The Claremont Institute, Vance attacked foundations who fund movements for social justice and characterized their support for Black Lives Matter groups as “investing in racial division.”

“We should eliminate all of the special privileges that exist for our nonprofit foundation class,” Vance said at the time. “If you’re spending all your money to teach racism to our children in their schools, why do we give you special tax breaks instead of taxing you more?”

The White House has generally expressed support for that policy view. In an early executive order, Trump asked the attorney general to identify large foundations to investigate for civil rights violations, along with large corporations and universities. So far, the administration has not announced any investigations into foundations, even as the deadline included in the executive order has passed.

Conservative philanthropic groups added their voice to oppose the proposed increase in taxes on foundations’ endowment earnings. The Philanthropy Roundtable, which said it supports conservative and free market ideas, led a coalition to send a letter to Senate majority leader Sen. John Thune of Montana and Sen. Mike Crapo of Idaho, who leads the Senate Finance Committee.

“We know policies that siphon private dollars away from charities to line the government’s coffers are antithetical to conservative values,” the signatories wrote of the proposed tax on foundation assets.

Other provisions include a charitable deduction but also new limits on company giving

The legislation also contains a mix of provisions that impact funders, nonprofits and communities. It allows the vast majority of tax filers to take a charitable deduction of up to $1,000 for individuals and $2,000 for married couples, which advocates believe will increase the amount everyday donors give.

The law also moved forward with a new cap on itemized deductions for the wealthiest tax filers, which advocates think will deter charitable giving. It also creates a new requirement for corporations to donate a minimum of 1% of their taxable income before receiving a tax benefit. Many corporations do not meet that threshold, meaning they may be discouraged from giving at all.

United Philanthropy Forum is a membership organization for foundations, which has long advocated around issues important to the sector. Besides the recent spending bill, they’ve followed executive orders, provisions that would have threatened the tax-exempt status of organizations and cuts to social safety net programs.

Matthew L. Evans, the forum’s vice president of advocacy and external relations, said the forum shifted their strategy several years ago away from defending the interests of the sector to advocating for the communities which private philanthropy serves.

“It really is an all hands on deck moment because again this is such an unprecedented time for us,” Evans said.

The forum was part of a coalition of nonprofit associations that helped organize a letter pushing back on multiple provisions in the spending bill, which almost 3,000 nonprofits signed on to support.

But one of the most important messages nonprofit advocates were delivering to lawmakers was around the impacts of cuts to social safety net programs, said Kyle Caldwell, who leads the Council of Michigan Foundations. He said his organization has advocated for foundations and the communities they serve in Michigan for decades.

“If you think about all of the systems that were in place: access to health care, access to education, access to food. All of those really were targeted services to the most vulnerable in our community. That’s where philanthropy invests most. That’s where nonprofits act most,” he said, adding that the cuts will “put higher demands on the nonprofit sector, which was already overburdened.”

When asked about concerns over the impact of the cuts, Senator Young from Indiana said he thinks the bill strikes the right balance.

“What we have found is that when the economy grows, people give more because they to have more to give,” Young said.

Associated Press coverage of philanthropy and nonprofits receives support through the AP’s collaboration with The Conversation US, with funding from Lilly Endowment Inc. The AP is solely responsible for this content. For all of AP’s philanthropy coverage, visit https://apnews.com/hub/philanthropy.