Purchase EE and I savings bonds to save for education expenses. They are the only kind that qualify for tax deduction benefits after you cash them in to be used for educational expenses.
Purchase savings bonds online, direct from the U.S. Treasury Department. If you don't have computer access, you can purchase them through your bank.
Register the savings bonds in the name of one or both parents or the savings bonds won't qualify for income tax deduction. The child can't be listed as a co-owner, but can be listed as a beneficiary.
Know what the income limits are to be able to qualify for tax deductions when the savings bonds are cashed in. If you think your income level will be too high at the time you cash them in, you can opt to cash them in early and transfer the money to a 529 or Coverdell account.
Realize that your child must qualify as your eligible dependent for you to use his cashed in savings bonds for college as an income tax deduction. If he won't qualify as your dependent, you may want to cash the bonds in early and transfer the money to a 529 or Coverdell account.
Acknowledge that the income tax exclusion rule applies only to inflation-adjusted I Bonds and Series EE Bonds issued after 1989. Also, the registered owner(s) of the bonds must be at least 24 years old at purchase to qualify.