Enacted by the General Assembly, The Rhode Island Baby Bond Trust Act is a visionary step toward expanding opportunities for Rhode Island’s most vulnerable children and closing the racial wealth gap. Once fully funded, this program will create a $3,000 account for children born to families receiving Temporary Assistance for Needy Families (“TANF”) through the RIWorks Program. Held and managed by the Treasurer’s Office, trust funds are invested for 18 years. Once the child reaches age 18, and has satisfied certain eligibility requirements, they can withdraw funds approved wealth building activities.
These funds allow the state to invest in the future of children most in need. They can be used for education, buying a home, starting a business, or making other long-term investments that build wealth — all within Rhode Island.
How does the program work?
** Treasury is actively seeking private and philanthropic partnerships to help fund this program. The Program will officially launch once adequate funds are secured. **
Each trust created would be managed and invested by the Rhode Island Treasury to promote steady growth and preserve the purchasing power of that Trust over that child’s life.
Promoting future economic engagement in Rhode Island’s economy, the funds that the trust aims to generate can be used in one of the following ways:
- Continuing education at an institution of higher learning, trade school, vocational school, or professional apprenticeship program in Rhode Island.
- Purchasing a home in Rhode Island.
- Creating/opening a business with its principal place of business in Rhode Island
- Any investment in financial assets or personal capital that provides long-term gains to wages and wealth.1
Frequently Asked Questions
- What is the maximum payout expected for each Trust?
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Ultimately, this depends on when that individual decides to withdraw their funds.
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- What is the anticipated rate of return per year for each Trust?
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Treasury aims that each investment should have a 7% return on their investment each year.
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Can I collect the funds from the Trust even if I no longer live in Rhode Island?
- An individual must reside in Rhode Island for at least two years before they seek to claim funds from a Baby Bond trust account.
- Can I withdraw the money in pieces, or do I have to collect it all at once?
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When the funds in the Trust are eligible to be paid out and requested, they will be dispersed in one lump sum – containing the initial investment and their share of the returns.
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Can I lose access to my Trust?
- Yes, you must claim the funds in your Trust prior to turning thirty-five and cannot do so until at least the age of eighteen.
Further Information regarding Program Implementation with RI DHS is coming soon.