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Originally Posted by Tink
You can buy whole life insurance through any life insurance company and accomplish the same.
One good way to save is to have a set amount directly deposited from your pay before you even see it. you can buy a trust or savings account, CD etc FOR the child in their name with another responsible adult as custodian. This way YOU can't touch it. Once gifted, it's out of your control. IF you choose to do this, just make sure the custodian you choose is someone who won't touch it either. It can be set up to only be withdrawn at a certain age. I would suggest setting it up so that it can't all be withdrawn at one time either.
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The whole life insurance is VERY inexpensive and it gains interest. They do not get a lot more expensive like a lot of the other things you see advertised. IMHO, whole life insurance is the best way to go. And if your kids decide to keep it as life insurance, they can do so - or they can take it out at a certain age to use for school. I would go speak to an actual insurance agent (shop around at a couple companies). My whole life insurance is for $100,000, and it's $3.57/month. Just to show you how inexpensive they are, if you were to put $3.57 just in a savings account every months for 18 years, you'd only have $771.12 - see, it saves you a ton of money.
Federal regulation says it has to begin to gain interest after a 3 years I think. Plus, if they don't use the entire fund for college, they'll still have what's left over in life insurance.