If you’re looking to sock away money for your child, one question you’ll face is whether to save the money in their name. There is more than one right answer, and it depends on how and when you expect they’ll use the funds.

The easiest answer is for college savings. Though there are other ways to accumulate funds for tuition, books, and housing, the tax-advantaged 529 plan is considered by most financial experts to be the smartest move since the funds can be invested and grow tax-free, assuming the funds are used for approved expenditures.

A 529 plan should be set up in a parent or other custodian’s name, as it will be treated much more favorably when colleges assess your student’s eligibility for financial aid. Conversely, a 529 plan in the child’s name will significantly hamper their aid calculation.

For funds desired for other purposes, a simple savings account is one option, as is a custodial account, which can be invested in stocks, bonds, and other assets. For both savings and custodial accounts, naming your child as the primary account holder is generally the wiser move. (If going with a custodial account, be sure to familiarize yourself with the IRS rules on acceptable withdrawals.)

By putting these accounts in your child’s name, some or all of what they earn will be untaxed. Children not earning wages can earn up to $1,100 in unearned income (e.g., interest, dividends, capital gains) before needing to pay tax. And earnings between $1,100 and $2,200 are taxed at the child’s rate, which is often zero. After $2,200, the earnings are taxed at the parents’ rate.

For kids with working wages, the calculation is different, but earnings from a savings or custodial account still have the chance to avoid taxation.