My DH and I had the same idea for our two nephews, and just mailed the paperwork for a third account for another brand new nephew. We opened a custodial brokerage account at Schwab for both of the boys. We are the named custodians on the account. Funds can be withdrawn at any time (by us) but they must be used for the benefit of the child. At age 18, full ownership of the account transfers to the child and they can do whatever they want with it. We figure they'll appreciate it much more later when they have a pile of cash from us rather than another toy now when they are babies/toddlers. Plus, they have every toy under the sun, so less clutter for the parents to have to deal with. Other family members have asked how to get in on it to boot.