A UGMA (“Uniform Gifts to Minors Act”) and a Trump Account (also known as a Section 530A account) are both ways to invest for a child, but they are designed for different purposes.
A Trump Account is a type of individual retirement account (IRA) for children. Funds cannot be withdrawn while the child is under 18, and the account is subject to IRA rules once the child reaches adulthood. Children born between January 1, 2025 and December 31, 2028 are eligible for this type of account and will receive a one-time $1,000 government contribution when the account is opened.
In contrast, a UGMA account offers more flexibility while the child is still a minor. The custodian can withdraw funds at any time as long as the money is used for the child’s benefit. Once the child reaches the age of majority (18–21, depending on the state), they gain control of the account and can use the funds for any purpose.
A child can have both a UGMA and a Trump Account. Families may choose a Trump Account for long-term, tax-advantaged retirement savings while also using a UGMA for greater flexibility throughout the child’s life.
For more information, see our blog post comparing Trump Accounts: What Parents Should Know.