Or you can buy a managed technology fund. Avoid custodial accounts if you plan to apply for financial aid. A custodial account, set up under your state's Uniform Gift to Minor's Act, allows you to tuck away money in your child's name. Once in the account, the money belongs to the child. When he reaches the age of majority, he can do whatever he likes with it.
Some parents see that as a negative.
But a bigger negative is that the money in this account makes it virtually certain that your child will not receive financial aid. That's because the financial aid formula assumes that the money in this account is available for college. So saving for college in your child's name counts heavily against you for financial aid. A more promising option is the state tuition program called a 529 plan. These programs allow you to save pre-tax money for college and keep it in your own name.