For tax purposes, the income from these accounts goes to the child, rather than the parent who is often the custodian. A custodial account is not considered to be another pocket for you, the parent. Instead, once the money goes into the child's account, it belongs to the child. The custodian is not entitled to use the principal or the earnings, except when he is acting on the minor's behalf and best interest. Also, the parent can't use the money for ordinary custodian expenses, such as private school tuition or a home computer.
Custodian accounts are cheap, easy to set-up and simple to manage.
Then you can deposit and take money out at will, although withdrawals will be taxed to you unless they are needed to cover extraordinary expenses. Assets in custodial accounts are outside the reach of your creditors, and they don't have to go through probate in the event of death. If you die, a successor custodian will take your place. This is not true with regards to most Mutual Fund companies. If the income is used for normal support of the minor and the account is managed by the same parent who set-up the account, the income will be taxable to the custodian if used for normal support.