For investing more than this amount or if your income exceeds $200,000 annually, choose a 529 plan. The challenge with 529s is that every state has a different 529 plan and they all work differently. Some allow you to pick mutual funds, some require you to choose funds based on your child’s age, while others are pre-paid tuition programs.
When choosing a 529 plan, pick a plan that allows you to choose the funds up front and to keep those funds all the way up until time to use the funds for education. Remember to stick with the four types of funds Dave suggests. Don’t use the pre-paid plans or ones that do age-based asset allocation.