First, I give you major props for starting a savings account for your child early.
If you are looking at setting up a savings account for your son, I would be leary about setting up a "college fund" account as the money can only be used schooling. If your son decides to opt out of going to college you will be stuck with a bunch of money you can not use without paying HUGE penalties.
I personally recommend to everyone that comes and see me to look into a "no load" mutual fund. Make sure you do your research prior to purchasing. There are several Credit Unions Nationwide that offer decent Mutual Funds. Most good funds no longer require a major initial ($5-10K) deposit. Look for something with a good morningglory rating that will allow you to open the account with $50 or $100 a month. If you can get a fund that averages 8-10% a year you will end up having around $20k in the account in 18 years with a $100 a month deposit. I strongly reccomend you open 2 accounts. One for your childs retirement (He will have over a million dollars at age 60 if there is $10k in the account by age 21 and the account averages 10% a year with no additional deposits.) If he chooses not to go to college, you can gift him the money, or you and your spouse can use it. (I'm also aware that there is very little if any mutual funds out there that are currently making over 5%. That's why it is a long term investment. I know it's discouraging at the moment, but things will turn around and you will end up with a year or two making well over 20%, so in the end it will average about 10%.)
There are thousands of resources on the internet for long term saving, as well as thousands of calculators out there. Just remember that inflation is around 3% a year on average, so when your son is retirement age, a million dollars is going to be chump change, and will not be able to provide annuity payments for the remainder of his life. (I know that is a very long time from now, but it's something to think about.)
