by 
The Curious Bag
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The blood that remains in the umbilical cord after birth is a rich source of stem cells that can be used in medical treatments. For that reason, many parents opt to save this material in cord blood banks.
Collection
Immediately after birth--either vaginal or cesarean--the umbilical cord is clamped and cut. The obstetrician or midwife collects the cord blood using a kit, which is then express-delivered to the cord blood bank.
Storage
Cord blood samples are stored in liquid nitrogen. Frozen this way, the samples remain viable indefinitely.
Options
Families can choose to store cord blood for use only in medical treatments for their child. Or they can donate it to a public registry so that it can be used to treat people who are a match for the stem cells.
Costs
Cord blood banks charge an upfront fee for collection and processing, plus an annual fee for storage. As of December 2009, typical fees were $2,000 for collection and $125 a year for storage. There is no charge when donating cord blood for public use.
Criticism
The American Academy of Pediatrics and the American College of Obstetricians and Gynecologists are skeptical about cord blood banking. Their position is that the possible benefits aren't enough to justify the cost.
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