Instead of spending a lot of time trying to pick the "right" investment, I would instead focus on investments that will whet his desire to know more about the markets, investing and personal finance. (If he was 25 and had $1,000 or $5,000, I might offer some different suggestions. But with $100, I think the goal should be to make investing fun and interesting.) There are a couple ways he could go. A more conservative approach would be to buy a mutual fund. Another option would be individual stocks. Even though he doesn't have enough assets to build a truly diversified portfolio, and transaction costs will eat into his capital, it might be more fun to buy even a couple of shares in a few companies. I'm sure he can come up with several companies that might hold a personal interest for him, and even buying one or two shares will intensify that interest.
Urge him to follow his investments and the markets, and be a resource for him if he has specific questions. There is an entire universe of information online about these topics, and if he gets into it, he can really prepare himself for his financial future. And it might encourage him to save and invest more. Another great way to spur him on would be to match a percentage of his new contributions.
I was so pleased to get your question! I wish more young people would demonstrate an interest in investing, and I wish more parents and grandparents would encourage it. Tell your grandson good luck from me, and I hope he turns into a real investor.