Treasury Secretary Scott Bessent said Wednesday that relatives of children should donate to their new “Trump Accounts” as opposed to buying them a toy. 

“Relatives, rather than giving a toy for a birthday, for a holiday, they can contribute to these accounts,” Bessent said on “Fox & Friends.” The Treasury secretary also called contributions to the accounts a “new kind of philanthropy.”

Bessent and President Trump touted the tax-free accounts, also called Section 530A accounts, during a Wednesday summit. Established under the One Big Beautiful Bill Act that Trump signed into law last July, the accounts are available for children who do not turn 18 before the end of the calendar year in which their parents open an account, according to the IRS.

Additionally, the Treasury Department is offering to contribute $1,000 to accounts for children born from Jan. 1, 2025, through Dec. 31, 2028. Starting July 5, individuals — including family members, friends and other adults — can contribute up to $5,000 per year to an account, a cap that will increase with inflation starting in 2028. Employers of the child or their parent can also contribute up to $2,500 annually, which counts against the $5,000 limit.

Charitable organizations and state governments may also make contributions, which do not count against the annual limit. 

The funds in the account have to be invested in certain mutual funds or exchange-traded funds that track the S&P 500 or “another index of primarily American equities,” the IRS says.

Parents can open an account for their child via elections on IRS Form 4547. Children can access the funds in their account on Jan. 1 of the year they turn 18.

“Trump accounts are a generational downpayment on the American dream,” he added.

The White House Council of Economic Advisers (CEA) projected in August that, under average stock market conditions, accounts without additional contributions for babies born this year will grow to more than $5,800 by the time they turn 18. Under the same stock market conditions but with maximum contributions, those accounts will accrue to more than $303,000 in value, CEA projects.