You aren't required to do anything at all, of course. It's probably better to ask another parent at the day care what the "standard practice' is there, because it can vary by center. If I've chipped in for a group donation, I generally just do an individual card for each teacher, and now my son's old enough to sign them (and somewhat decorate them). If I don't chip in for a group donation, I usually get a small gift and card for each teacher.
This year, the director is asking for Visa gift cards that the front office can use to purchase food, gifts, flowers, etc. for all the teachers -- a group donation with a twist -- because I hate Visa gift cards (additional fees for no reason). So I'll do individual gifts this year.
Also, keep in mind your year=round gift giving and adjust accordingly. I do a big (to me) gift at Christmas, and a medium one when my son leaves the classroom to move up a year. So my teacher appreciation gifts are a bit smaller in general. Some people give a lot more year-round. Some people give nothing. Most do something in between. If you express sincere appreciation and fit your own budget, you can't go wrong.