What is the best way to start college funds for nephews?

I wish to start college funds for my 4 nephews (all below age 5). I opened a savings account in my name when my first nephew was born and have put about 200 per year per child in that account. Assuming I put 200-250 per year, each child will have maybe 4000-5000 when they get to college age.

Should I keep the account in my name and continue to add the money and then write each boy a personal check when they get ready for college. Or, should I put the accounts in each of the children's names? What type of accounts should they be?

I don't want to negatively impact their ability to get college funding because they would likely qualify for some assistance based on parents income, etc. But, I also want the money to work as much as possible in their favor.

I would really appreciate some wisdom on this matter. Thanks!

with the amount of money you are talking about your chooses are limited -- i would go with savings bonds!!!!

saving bonds....

In the US we have 529's. They allow you to invest in mutal funds that when used for college are tax free. Call or visit a mutal fund page and it will explain 529's to you. I have them for both of my kids.

If you're in the US, you should open a '529' fund for each.

That allows the 'savings' to be invested in your choice of investments - could be conservative (bonds), aggressive (various mutual funds) or age-based.

The income a 529 generates is tax-fre if used for education.

The 529 is owned by you, with the child listed as the beneficiary.

If the child chooses not to attend college, the 529 can be changed to a new beneficiary.

If (in 13 years) the 529 looks like it could harm the childs chances for Grants or Aid, then the beneficiary could be changed.

Non-education use is taxable with a 10% penalty.

Good luck and Merry Christmas

If you get accounts in the kids' names the legal guardians have access to and can take the money whenever they want. If you leave it in your name you have to pay taxes on it and if it grows too much the kids may have to pay taxes if it's over the "gift" limit for the year.

You can start 529 accounts for them.

As much as you want to help your nephews you should really think about saving it for your retirement. You can always gift them some money when they reach college.