Does the Government Guarantee Returns?

Let's be clear upfront: No, the government does not guarantee returns on Trump Accounts. The federal government guarantees the $1,000 deposit for eligible children. But what happens to that money after it is invested depends entirely on the stock market.

This is an important distinction that every parent needs to understand before opening an account.

What IS Guaranteed

The government guarantees one thing: the $1,000 pilot deposit for children born between January 1, 2025 and December 31, 2028. If your child qualifies and you file IRS Form 4547, the deposit will be made.

That deposit is real money that goes into the account. It is not a voucher, a credit, or a promise. Once it arrives, it is invested.

What Is NOT Guaranteed

Once the $1,000 is invested — along with any family contributions — it is subject to market performance. That means:

• The account can go up in value. In most years, the stock market rises.
• The account can go down in value. In some years, the stock market drops — sometimes significantly.
• There is no floor or minimum return. The government does not make up the difference if the market drops.
• There is no FDIC insurance. Bank deposits are FDIC insured. Investment accounts are not.

The Historical Case for Confidence

While returns are not guaranteed, history is strongly in your favor. Here is why most financial experts are optimistic about 18-year investment horizons:

• The S&P 500 has never lost money over any 18-year period. Going back to 1926, every rolling 18-year window has produced positive total returns.
• The average annual return is roughly 10% before inflation (about 7% after inflation).
• Even the worst 18-year periods still delivered positive returns, though some were well below average.

This does not guarantee the next 18 years will be positive. But it shows that historically, patient long-term investors in the U.S. stock market have always come out ahead.

What About Market Crashes?

Market crashes will happen during your child's 18-year growth period. There is no way around this. The 2008 financial crisis, the 2020 COVID crash, and other downturns are part of the stock market's history.

The key fact: you cannot withdraw before age 18 (except for rollovers, excess contributions, or death). This means a crash in year 5 has 13 more years to recover. A crash in year 15 still has 3 years. Historically, the market has recovered from every crash.

For a deeper look at what happens during downturns, read our guide: What Happens in a Market Crash?

SIPC Protection (Not the Same as FDIC)

While Trump Accounts are not FDIC insured, the brokerage custodian holding the account is typically a member of SIPC (Securities Investor Protection Corporation).

SIPC protects against:

• Broker failure — if the custodian goes bankrupt, SIPC covers up to $500,000 in securities

SIPC does NOT protect against:

• Investment losses — if the stock market drops, SIPC does not cover the decline

In other words, SIPC protects you from the company holding your money going under. It does not protect you from the market going down.

The Bottom Line

The government guarantees the $1,000 deposit. It does not guarantee what that deposit — or your contributions — will be worth at age 18. But history strongly favors long-term stock market investing, and the 18-year lock-up period protects against emotional selling during downturns.

To see projected outcomes at different return rates, use our Growth Calculator. For a detailed look at historical returns, visit our expected returns guide.