Is it worth putting your savings into a cash ISA?

The ISA season – now upon us – is the scramble of last-minute investing in the run-up to the end of the tax year. An ISA is a valuable way of protecting your savings from the tax man, but if you don’t use your annual allowance by 5 April, it is lost forever.

Many experts expect a bumper ISA season this year, with stubbornly low interest rates and improving investor confidence meaning savings will flow into stocks and shares accounts rather than cash.

Yet many savers prefer to keep some of their nest egg in cash where they can access it easily without worrying about fluctuating markets.

There is currently a massive £226bn in cash ISAs, up 6.6 per cent on a year ago. The Government permits savers to use a maximum of half of the annual allowance in cash each year – and the rest in stocks and shares. The combined maximum is £11,520 this tax year. With a new tax allowance of £11,880 in sight next month, many people will be considering the best home for their money.

To find out how to get the best rate on your cash ISA in 2014 and for more insight on making the most of your savings all year round, download the latest edition of FE Investazine here.