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ISA-ing on the cake

So many ISAs, so many ’good deals’ when it comes to squirreling away your cash in an ISA. But what’s the best option? We take a look.

At the moment you can put up to £10,200 a year into an ISA (or £5,100 if it’s just cash)and your returns will be paid tax-free.

Cash ISAs are ideal for rainy day savers. Basically they are risk free, though there’s a lot of choice. While some ISAs pay as little as 0.1% interest, the market leader - Barclays Golden ISA Issue 3 – pays a headline rate of 3.25%.

ISAs that invest in stocks and shares are more complicated. You can choose to put your money in a range of investments, from low risk government bonds to investment companies and trusts. The idea is to pick funds that give the highest return but that pose the lowest risk.

Beginners often use independent financial advisers to help them pick funds that suit their needs, but this service comes at a cost that is discounted if you user a fund supermarket.

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