I ended up with a combination of the above (through circumstances more than forethought...) but I'll give you some basic advice. Others can chime in if I'm giving inaccurate or inexact info.
529s are a great choice for avoiding capital gains when you withdraw funds for higher ed, especially if your state lets you deduct your contributions as you go along. Mine does not, but I liked that I can withdraw contributions at any time without penalty. The downside is that earnings within the account will get you a penalty and taxes upon withdrawal if you don't use them for college. However, you can use those funds for private K-12 school, laptops, books, and other school supplies. We qualified for financial aid this year based on our low business income in 2018, but we were still able to use funds for a new laptop for the kid. If we don't go through everything we've saved in that account, I'll probably use it to take some classes myself or save it for a young relative. The process of withdrawing funds was simple, but since this is my first time doing so, I can't speak to what it will be like when we file taxes for 2020.
We started a small UGMA brokerage account for my son when he was about 15 and started taking an interest in investing. The upside is that I'm on the account and that he can have some monitored experience with the stock market. The downside is that he's on the account - which means it counts as part of his assets on FAFSA. Student assets are always counted more heavily on FAFSA. The other thing is that, depending on your state, your child may not get to claim individual ownership of that account until they are 21 and that selling stock will incur a capital gain.
Of course, there are regular savings accounts you could put the money into - just set it up as a joint account. I did that for my son's savings and checking accounts when he started earning money of his own.
The Roth IRA is honestly my favorite, although you're limited as to how much you can contribute each year, which may not matter since you are starting when your daughter is so young. I like it because I can withdraw contributions (5 years after establishing the account) for any purpose or I can just let it ride since my son chose a less expensive school.
Commercial break...Here's my plug for community college, which is saving us thousands of dollars we can then use for his master's degree or a down payment or world travel...end commercial break.
If you're thinking about college, the more you can put into retirement funds the better. None of the financial aid models take retirement funds into account. We knew our son would likely apply to a public college, so we worked on paying off our mortgage since FAFSA only looks at current savings and investments. I would also suggest that as soon as your daughter can work, she starts putting money into her own Roth - or you can help her do so. My son has had a small craft business since he was 12 and we've committed to putting in an amount equal - or almost equal - to his earnings for the year. That means he has to file taxes, but that's not a big deal. We're not talking a lot - maybe a thousand or two a year - but it will grow dramatically over the years.
I know my comments are weighted heavily towards college, but only because I'm going through that process right now. We honestly didn't know for sure that the kid would even go to college, so our contributions to a Roth or 529 could have been used just as easily for a down payment on a house. And they still might!
