Co-Founder, President, Chief Executive Officer & Chairman of the Board, Robinhood Markets
Robinhood CEO Vlad Tenev breaks down how Trump Accounts work
President Trump rang the New York Stock Exchange opening bell from the Oval Office on Monday to celebrate the launch of the new investment account program for children dubbed "Trump Accounts." Robinhood chairman and CEO Vlad Tenev, who assisted with the project, joins to discuss.
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About Vladimir Tenev
Vladimir Tenev, co-founder and CEO of Robinhood Markets, has been engaged in the rollout of the Trump Accounts initiative, a government program that provides a $1,000 federally funded brokerage account for every newborn in the United States. Tenev stated that Robinhood serves as the broker and sole initial trustee under the direction of the U.S. Department of the Treasury, in partnership with BNY Mellon. He said the goal is to increase U.S. equity ownership from 62% to 95% and described the accounts as commission-free and designed to accept contributions from employers and other donors. Tenev also noted that millions of accounts had been opened and the app had been near the top of app store charts. Separately, Tenev announced Robinhood's acquisition of Canadian crypto exchange WonderFi, marking the company's entry into the Canadian market. He discussed the company's expansion of perpetual futures contracts in Europe and plans to bring them to the U.S., as well as the launch of what he called "agentic finance" features. During the company's annual meeting, Tenev highlighted record equities trading volumes, a prediction market product that he said was generating over $400 million in annualized revenue, and plans to offer tokenized stocks in Europe. He also noted that Robinhood would support the SpaceX IPO with no minimum account size.
Transcript (10 segments)
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Interviewer0:00
Welcome back to the ticket. In the Oval Office today with a very big bell on his desk, President Trump rang the New York Stock Exchange into trading. This was to celebrate the launch of new investment accounts for children. They are called, as I mentioned earlier, Trump accounts. They were created under the tax and spending law, the big beautiful bill. And there's the video right there with gusto, the president's clanging away. These savings accounts are for any child under 18, babies born again between 2025 and 2028 with a $1,000 contribution from the federal government. Earlier today, I spoke with chairman and CEO at Robinhood, Vlad Tenev. Robinhood assisted the government putting these accounts together. Vlad, from your perspective, what is in it for the average American family with these Trump accounts that didn't exist before?
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Vladimir Tenev0:52
Well, I think the secret is unlocking ownership. So right now, 62% of Americans have ownership of US equities. And the US equity market has been the greatest engine of wealth creation in human history. Now, the problem is there's still 35% of Americans that don't own any equities. And not only that, but the vast majority of those individuals buy them much too late, when they're in their 30s or 40s or even beyond. So, the Trump accounts initiative is a brokerage account for every newborn. And everyone under 18 is eligible, but newborns get a $1,000 seeded by US Treasury. And that gives you ownership from birth and the power of compound interest, which Albert Einstein has called the eighth wonder of the world. So, just that $1,000, if you contribute an additional $100 a month, by retirement age, that could be millions of dollars. So, it helps children secure their financial future and also helps them become owners of the great American economy and I think there's a huge civic component. A society where we're all owners of the shared future is one that's more stable, more free, more prosperous. So, I think it's just essential.
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Interviewer2:25
The president talked a lot about this being a windfall when a child turns 18, but as I understand it, you get taxed if you start taking these dollars out of your account at age 18, and the real idea is to keep it until you're 59 and 1/2. Can everyone wait that long, Vlad, to get this windfall?
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Vladimir Tenev2:46
Well, so, the structure of these accounts is that it turns into a traditional IRA at the age of 18, which means that it has all of the tax advantages and benefits of an individual retirement account. Moreover, from construction, Robinhood has helped in partnership with Treasury and BNY Mellon and the National Design Studio to make it really easy for employers, for churches, for friends and family to contribute. So, we think that for many people this will be the primary and the only way to own US equities. And it's going to be done in a tax-efficient and incredibly low-cost manner, which I think for many people this is going to be the best possible option for becoming a long-term owner of US equities.
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Interviewer3:48
And talk to me about the low-cost method, because as I understand it, the transaction or management fees are going to be very very low on these accounts.
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Vladimir Tenev3:57
Well, there won't be transaction fees in the normal sense. So, all transactions will be commission-free. And this is something that Robinhood was well positioned to power because one of our contributions to the brokerage industry is lowering commissions per trade to $0. It used to be that in order to make an investment or make a trade, you would be charged $7 to $10 every single transaction. And also, you would need to put in $1,000 or $2,000 to even open up an account. And so, we changed the industry by replacing that old commission model with commission-free. And now, the administration has taken that one step further. Not only are you not paying commissions, but for newborns, you're getting a $1,000 seeded pilot funding by the US Treasury. So, for most people, this is just money in your pocket that helps you kick-start your financial journey.
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Interviewer5:05
For many Americans right now, if they're planning ahead for their children, they use 529 accounts dedicated for college education and education-related expenses. And those, as I understand it, have better tax deductions and better tax parameters around them. So, what makes a Trump account, if you're thinking about a 529 account, better?
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Vladimir Tenev5:32
Yeah, I mean, 529 accounts are a great tool for educational expenses. And I think they've been reasonably successful. The problem is all of the other expenses, all the things besides education, in addition to just infrastructure for employers, for philanthropic donors to contribute, it just hasn't been quite there. So, I think with this program with close collaboration with our private sector partners, Bank of New York Mellon, as well as the US Treasury, we're really designing it from the ground up to be purpose-built to be optimized for accepting large-scale donations from individuals and from employers. And you get the flexibility of being able to use these funds for more than just educational expenses.
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Interviewer6:31
That's great, Vlad Tenev with Robin Hood. I appreciate your time very much. Thank you.
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Vladimir Tenev6:36
Thank you.