Ours are with a high interest account with our bank. Just because its easier to transfer as needed. I did at one stage have it in a term deposit, however once it matured just left it in the account as the interest rate at that stage was comparable anyway plus I had access to the funds. Although its their savings, its also money to be used for their education first and foremost. Interest has always been declared on my tax but thus far has made very little impact in that regard. They have more money saved than I do lol