Most parents with children of four or five will be fully occupied in coming weeks with the thought of their first day at school. But, though it may seem early, now may also be the time to start making provision for the costs of their future education.

The decision to abolish fees for third-level education has relieved the burden of paying university fees for many parents. But with rents soaring in Dublin and good student accommodation proving increasingly scarce in towns with third-level colleges and institutes, the cost of maintaining a student for a minimum of three years at a university or college continues to grow.

Those parents considering a private secondary school also face ever steeper costs with many Irish schools now charging more than £4,000 a year for boarding fees, while day fees regularly top £2,000.

So what options are available to parents keen to start saving to provide for their children's educational needs down the road?

As always with investments of any sort, a great deal depends on how much risk people are prepared to assume, whether they have a lump sum to invest or plan to save on a regular basis and how much time they are prepared to spend on money management. But one thing financial advisers agree on is that it's never too soon to start. The longer the capital is invested, the greater the likely return. Junior may only be four, but in 15 years time, he's likely to be a very expensive 19-year-old.

The other thing that seems certain is that as the old sureties fade, people will have to devote more time and effort to their financial planning to ensure they get the best returns. Like their children, those no longer content to dump their hard-earned money in a low-yielding savings account may be facing an education process in itself.

"There are a number of novel options for savers who are prepared to be a bit creative and manage their money for themselves," says Mr David McCarthy of Galway-based banking consultants McCarthy & Associates. "However, if they are not prepared to be creative and take the time to manage their money, options are more limited."

Those who want a safe and easy option and who plan to put aside a little every month can take the traditional route of putting their money in a deposit savings account with a bank or building society. The capital invested will be guaranteed but in the current low-interest environment, parents cannot expect their money to deliver much of a return.

Among the better deposit account options available is Anglo Irish Bank's monthly millennium account, in which a minimum balance of £2,000 must be invested and which offers a 6 per cent gross return. An Post's National Instalment Savings Account offers a 30 per cent tax-free return for those who save over a five-year period.

Parents looking for a higher return may wish to consider investing in a Personal Investment Plan (PIP) or a Personal Equity Plan (PEP). The two are relatively similar, allowing savers to put away a monthly amount which buys units in a fund invested in the stock market.

However, the PEP must be 55 per cent invested in Irish equities although it is subject to tax at a rate of just 10 per cent compared to the PIP on which the standard rate of 24 per cent is payable.

The returns on such an investment depend on how the stock market and the fund manager perform but financial advisers caution that with PIPs and PEPs, an investors' capital is not guaranteed. This means they may not always suit those who want to ensure they have a certain capital sum when college enrolment begins. Although most institutions advise investing for a minimum of five years and preferably longer, the size of the return is also heavily dependent on the stage of the market cycle at which the investment matures.

By contrast, the with-profits policies of the mutual life assurance companies offer a secure investment option but more conservative growth. Although a with-profits policy might not deliver the same return in good times as a unit-linked policy, it is likely to be a better performer when times are tough.

In recent years, as stock markets soared and hit ever headier heights, most investors would have made far more from unit-linked funds than from an investment in with-profits policies. But for those invested over the long-term and who do not encash their policies until the term expires, with-profits policies provide a means of participating in stock market gains without the volatility associated with other products.

The options open to those with a lump sum are more varied than those planning to save regularly and many financial advisers are now advising clients to build up a little nest-egg in an ordinary deposit or special savings account and then review their options.

Among these are tracker bonds, which can deliver gains from tracking the performance of particular stock markets around the globe but generally guarantee the capital investment.

While ordinary with-profits policies remain an option for regular savers, the with-profits bonds currently offered by the life assurance companies are suitable for those with a lump sum.

Scottish Provident's bond, for instance, requires a minimum investment of £5,000 over a 10-year period but guarantees a return of 122 per cent while similar products are on offer from other life assurers including Norwich Union and Canada Life.

The more adventurous, and those with some time to spare, might consider taking a do-it-yourself approach to equity investment rather than relying on others.

Capital gains tax has fallen to just 20 per cent, while a number of big flotations are in the offing - including Telecom Eireann and First National Building Society - and might provide opportunities for those prepared to ride out market cycles by staying in for the long haul.

One mother, who works in the financial services industry, says that she saved her children's allowance regularly until it built into a lump sum, then bought a blue-chip equity with it and watched it grow along with her kids.

Increasingly, financial advisers are also recommending that people take a varied approach to their investments rather than putting all their eggs into one basket.

"I always believe in people doing a bit of everything," says Ms Dervilla Whelan, partner with chartered accountants O'Hare & Associates. "You could save with a PEP for one child, then save with a building society and buy a few shares for the next."