Remember, if you keep your cash in the ISA, it stays tax-free year after year.
Easy access
Instant access ISAs are best suited to savers who may need to get their hands on their money on a rainy day.
The AA Postal Access ISA offers the best headline rate for this type of product. Interest is at 3.5 per cent with a 3 per cent bonus rate for the first 12 months included. However, the minimum deposit is £2,500 and savers are not allowed to transfer from existing ISAs.
For people with less money to put away the Cheshire BS Direct Cash ISA requires a minimum investment of just £1,000 but the bonus rate is reduced to 2.5 per cent for the first 12 months.
One year
If you can afford to save this year but think you may need access to the money in 12 months for a big purchase or event, then one-year ISAs are a good option. These allow you to take the money out after 12 months or reinvest it in another product.
While the Saga One-Year Fixed Rate ISA offers 3.6 per cent AER and has a minimum deposit of £1, we have chosen the Santander Direct ISA Issue 9 as our pick because it allows balance transfers from previous ISAs, making it a much more flexible product. Savers will have to fork out a £2,500 minimum investment however.
Long-term fixed
If you are happy locking your money away for longer you will get a better rate of return. Halifax offers the most attractive rates for this type of deal. Its Five-Year ISA Saver Fixed account will earn 4.5 per cent while the three-year version will pay 4.3 per cent.
Junior ISA
Measures introduced in the 2011 Budget now mean that under-18s can open an ISA in their own name for the first time. The products are not open to anyone that qualifies for a Child Trust Fund, and the limit is set at £3,600 rather than £5,340.
The good news is that the money cannot be accessed by either parent or child until they are 18. This removes the temptation to spend it and helps secure your child’s financial future.
Nationwide offers 3.25 per cent on its most attractive Junior ISA but it is not available to over-16s. This rate also includes a 0.9 per cent bonus until 31 January 2014, so be aware that the rate will drop after this time.