Federal Child Savings Accounts: Financial Support for Future Generations
This act establishes a federal child savings account program to support children's financial futures. Parents or guardians can set up accounts, and the government will make annual deposits and matching contributions, helping to build savings for education or other significant life goals. Funds in the account will generally not be considered when determining eligibility for most federal assistance programs.
Key points
The government will deposit $500 annually into each eligible child's savings account, with potential matching contributions up to $250 if parents qualify for the earned income tax credit.
Funds can be used for higher education expenses, first-time home purchases, or rolled over into a Roth IRA upon reaching age 26 or obtaining a degree.
Accounts are fee-free, invested solely in U.S. Treasury bonds, and balances (up to $100,000) generally do not affect eligibility for most federal means-tested programs.
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