WASHINGTON D.C.: The Trump administration launched its new Trump Accounts investment program on July 4, giving eligible U.S. children government-funded investment accounts as the country celebrated the 250th anniversary of its independence.

The program provides a $1,000 government-funded investment account for U.S. citizens born between 2025 and 2028. Families, employers and others can contribute up to $5,000 annually on a pre-tax basis, with the funds automatically invested in a low-cost index fund designed for long-term growth.

Supporters say the initiative will encourage investing and financial literacy from an early age, while critics argue its long-term benefits will depend largely on families' ability to make regular contributions.

"The $1,000 federal contribution at birth helps remove the barrier of having nothing to start with, which has historically been one of the biggest obstacles to saving," said Andy Blocker, head of policy, regulatory and government relations at Edward Jones.

"If by year-end more families have a clear onramp to begin saving and investing for their children's financial futures, that's success."

Adam Michel, director of tax policy studies at the Cato Institute, questioned whether the program would significantly reduce wealth inequality.

"Government handouts have a long track record of failing to lift people out of poverty, and there's little reason to think this one will be different," he said, adding that employer matching contributions are likely to benefit families with stable jobs and greater capacity to save.

Several major U.S. companies have pledged support for the initiative through employer matching or additional funding, including Visa, Dell and Comcast. Chipmaker Micron recently pledged $250 million to support the program.

The Treasury Department, which oversees the initiative, said Americans can also open a Trump Account for children under 18 with a valid Social Security number, although only U.S. citizens born between 2025 and 2028 qualify for the government's $1,000 contribution.

Robinhood and BNY will administer the accounts, while the Treasury has warned families to remain alert to scams and fraud.

Account holders will gain control of the funds when they turn 18 and can either withdraw the money or continue investing. At launch, contributions will be invested in the State Street SPDR Portfolio S&P 500 ETF, with additional investment options from BlackRock and Vanguard also available.

"The thesis behind Trump Accounts is to have more people participate in the greatest wealth creation vehicle on the planet, which is the U.S. market," said Steve Quirk, chief brokerage officer at Robinhood.