Companies that have given good returns for tax-exempt special savings accounts (Tessas) over the last five years are quite likely to do the same with cash ISAs.According to a survey of 89 companies by Moneyfacts magazine, the top five Tessa performers are Earl Shilton, Kent Reliance and Mercantile building societies, Investec bank and Staffordshire building society (in that order). Bigger and better-known operators such as Northern Rock, Bank of Ireland and the Royal Bank of Scotland are bumping along in the bottom 10.”We’ve found that mutual building societies tend to be in the top half of investment league tables and high-street banks are in the bottom half,” says Rachel Thrussell of Moneyfacts. “You can’t say that past performance will guarantee future returns but it can be quite a good indicator. Certainly, mutuals tend to give better returns over the long run because they don’t have shareholders that they have to keep happy so they can afford to give their investors more.”Interest rates may also change according to the amount of money you have in your cash ISA. It pays to check your interest rate every six months or so on a variable-rate account. The highest return currently available in a cash ISA is from internet bank Smile, which pays 6.75 per cent on balances over £1. If you are not happy to run an account over the internet, the next best rate is from Stroud & Swindon building society at 6.60 per cent.

Both of these ISAs have instant access and no penalty for transferring to another provider, which is important if you find you want to transfer to get a better rate.Both Smile and Stroud & Swindon ISAs carry the CAT standard (low cost, easy access, simple terms), which means that they meet certain criteria laid down by the Government Most of the big banks offer CAT-marked cash ISAs. However, because providers must follow these strict criteria to qualify, they may not give as good a rate as non-CAT-standard products, particularly if you are investing larger sums of money.With interest rates falling, you may prefer a fixed-rate ISA although it does not give you instant access to your savings, making it very difficult to switch to a better rate. One of the highest rates available is from the Julian Hodge Bank. Savers can opt for a one- to five-year tie-in with higher rates the longer they commit For a five-year fix, the rate is 6.05 per cent. But investors trying to cash in fixed-rate ISAs early will face a penalty.”I wouldn’t like to see anyone go for a rate that was fixed for more than three years,” says Janice Thompson of Moneygro, the discount broker and independent financial adviser. “You never know what might happen and you’d be sick as a parrot if interest rates suddenly went up to 10 per cent – which they could – and you were stuck with just six. So even if you’re very, very risk-averse, I would think twice about committing yourself for too long.”Cash ISAs will be available to 16- and 17-year-olds from April, and parents can take advantage of this to give their teenage children a gift, wrapped in an ISA tax shelter, which could help them pay their way through university later on.

With the advantage of no tax deductions over the years, this investment will grow faster than an ordinary savings account.. With less than three weeks to go until the end of the tax year (5 April), there is not much time left to invest your tax-free individual savings account (ISA) allowance. Only the most hermit-like of people will have failed to notice how fund managers, banks and building societies are falling over themselves to bombard us with advertising. Most of them are also planning to keep branches and offices open until midnight on 5 April to cope with, what they hope will be, a last-minute rush.

With less than three weeks to go until the end of the tax year (5 April), there is not much time left to invest your tax-free individual savings account (ISA) allowance. Only the most hermit-like of people will have failed to notice how fund managers, banks and building societies are falling over themselves to bombard us with advertising. Most of them are also planning to keep branches and offices open until midnight on 5 April to cope with, what they hope will be, a last-minute rush.
However, early indications are that they are likely to be disappointed ISA sales have been slower this time around. Last year was an encouraging one for the Government and fund managers alike. It proved to be a bumper time for ISAs as their popularity reached new heights – despite the fact that they were introduced only two years ago.The great reduction in investor interest this year has much to do with the fact that there has been nothing similar to the technology boom.

Last March, investors, many of whom were inexperienced and investing for the first time, couldn’t get enough of technology funds. But when the technology sector crashed in April, they got their fingers burnt as well and sat on paper losses for months.Apart from there being no obvious focus to replace technology and capture investor interest this time around, the problems the stock market has been experiencing haven’t helped matters. The FTSE 100 is seeing its lowest levels for three years, which is deterring investors from buying stocks and shares. Of course, when shares are cheap, it is the best time to invest, but persuading investors of that can be hard.So fund managers have their work cut out. An additional problem for them is that the public are more likely to approach their bank or building society when looking for an investment, rather than buying through a manager. According to research from Alliance & Leicester, more than two in three people are avoiding fund managers in favour of banks or building societies.