Child Savings Accounts: Financial Support from Birth
This act establishes special savings accounts for children, called American Opportunity Accounts (AO accounts), to support their financial future. The government will make initial and annual contributions to these accounts, based on family income, and these funds can be used for education, homeownership, or other long-term investments after reaching adulthood.
Key points
Children born after December 31, 2021, will receive an initial deposit of $1,000 into their AO account.
Annual contributions to AO accounts will be made until the child turns 18, with amounts varying based on household income – lower incomes receive higher contributions (up to $2,000 annually).
Funds in AO accounts will be tax-exempt and will not be considered when determining eligibility for other federal benefits, including student financial aid.
Money from the account can be withdrawn after age 18 for purposes such as education (higher education, vocational schools), homeownership, or other investments that increase long-term wealth.
A dedicated American Opportunity Fund Board will manage the fund and accounts, with investments made in U.S. Government securities.
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