, first, congratulations on your first child later this year! Such an exciting time. Congratulations, too, on the financial preparation you and your husband have done already. My response is in two parts to answer your question. 1) opening a 529 plan requires a name and social security number, so it's impractical (you could make yourself or husband the beneficiary and then transfer, but ugh!), so wait until your daughter is born; 2) I would absolutely recommend a 529 plan. All gains (divvies and capital) are tax-free and while there is a 10% penalty on withdrawals not spent on education, you are still way ahead of keeping those funds in a taxable investment account. Under current law, k-12 expenses are allowed as is the ability to transfer to a new beneficiary (and maintain the tax-free growth), should your daughter not go to college. Even with the 10% penalty, the tax-free growth puts you ahead of a regular account and becomes, in effect, a back-up retirement fund.