Trump accounts just got a massive promised donation. Here’s what to know about who qualifies

Parents, you’re going to need a bigger piggy bank.

An announcement by Michael and Susan Dell that they will donate more than $6 billion in the form of contributions to soon-to-be-opened Trump accounts is a “super exciting” development for American children, experts say.

WATCH: Dell family pledges more than $6 billion for U.S. children to build on ‘Trump accounts’

Ray Boshara, senior policy advisor at the Center for Social Development at Washington University in St. Louis, said that the donation is “a remarkable sum in any philanthropic endeavor.”

Contributions to the investment accounts, which were signed into law on July 4 as part of President Donald Trump’s massive spending bill, can be made beginning next Independence Day. Already, children born between Jan. 1, 2025, and Dec. 31, 2028, will receive $1,000 in seed money contributed by the federal government.

With the Michael & Susan Dell Foundation’s donation, children 10 and younger born before 2025 will receive $250 in their Trump accounts. The children also must live in ZIP codes where the median family income is below $150,000.

Based on his conversations after Tuesday’s announcement, Boshara said he senses other organizations will be inspired to follow in the Dells’ footsteps. That’s because the accounts are constructed with a unique feature allowing organizations, such as cities, state and nonprofits, to contribute to all children in a “qualified class,” like those born in a certain year or state.

How will Trump accounts work?

Trump accounts will function similar to retirement accounts. Children will not be able to withdraw from the accounts before they turn 18. Withdrawals will incur a penalty unless the funds are used for qualifying reasons, such as higher education expenses or the purchase of a first home.

WATCH: 4 things to know about Trump accounts for kids

The accounts will be managed by the Treasury Department’s “designated financial agent,” according to the government, but parents will be able to transfer the accounts to their own brokerage, if they have one, “at a later date.” And the money will be invested in stock market indexes like the S&P 500.

Parents will be able to open accounts by filing IRS Form 4547 once the draft form is finalized, and the government says that online enrollment will be available next year.

What families need to do to open an account, and other caveats

Since Trump signed the accounts into law, the government has clarified some of the concerns experts had initially. For instance, the balance of the accounts will not count against a family’s asset limit, the threshold that determines eligibility for government support like nutrition assistance, Boshara said.

Still, other concerns remain, said Madeline Brown, senior policy associate at the Urban Institute.

Chief among them is that parents can only open accounts by filling out a tax form, rather than being automatically enrolled.

“We’re worried that millions of families, especially lower- and moderate-income families, won’t go through all of those steps to actually have the account created,” Boshara said.

For now, the government says IRS Form 4547 will be able to be filled out whenever parents choose, though the form isn’t available yet. By mid-next year, parents are expected to be able to enroll online.

Brown noted that children must have a Social Security number to open a Trump account, so the Social Security Administration has a database of everyone who is eligible.

“The administration has been very clear that they want this to be a program for everybody,” Brown said. “Why add this extra step?”

The withdrawal penalties also limit the functionality of the accounts for some families, Brown said. While $1,000 — or even $250 — is useful seed money, parents might decide that a 529 plan is a better choice given its wider range of options for withdrawals. A high-yield savings account would be even less restrictive.

“If you come up against an expense that was unexpected and you have some money sitting in an account, even if you’re going to get penalized, you might still withdraw,” Brown said.

Boshara also wants to see progressive deposits – contributions that increase as families’ incomes decrease – for kids in low-wealth households.

“It’s great that the Dells, and potentially others, will contribute money to these accounts for low-income kids. However, that’s no substitute for the government itself actually doing progressive deposits for all kids, ideally at birth and beyond,” he said.

WATCH: A Brief But Spectacular take on building a birthright to capital

These concerns don’t outweigh his hopes for the accounts, though.

“Not enough Americans are benefiting from the stock market, and I think Trump accounts have that potential,” Boshara said. “That potential will be realized once all kids have accounts, and there’s real money in those accounts.”