Most often, a portfolio of several products is the best way to go, providing diversification.
Mutual funds are probably the most well-known vehicles for education funding.
You will, however, have to pay taxes annually on fund distributions of taxable income and capital gains. Individual bonds have traditionally been another way for parents or grandparents to help fund a child's education. Then, at maturity, the interest earned on qualified savings bonds is tax-free if the bond proceeds are used to pay for qualified higher education expenses. There are also income restrictions. Furthermore, many colleges and universities do not county either annuities or life insurance when assessing a child or parents ability to pay in a financial aid situation.