If you give them an allowance, discuss setting aside a portion for their college education. Some parents even allocate a portion to the kids' retirement plan. Decide how much money you can set aside. Then select a strategy that will get you to that goal. Gifts to kids are tax-free.
Savings bonds are very secure investments.
Check the maturity date and yield, however, to determine whether the earnings will be enough to fund the child's education. Keep in mind that if you take money out of your retirement accounts to fund your children's education, you'll need to replenish it to make sure there's enough for your retirement. A financial planner can help you decide which of these vehicles is best for you. Best Ways to Invest Sending a son or daughter to college takes a huge bite out of any parent's budget. Research shows that saving for education is second only to saving for retirement, says Christine Mayden, a financial consultant with Merrill Lynch.