Compare ISAs and make the most of your savings

Now, perhaps more than ever, exactly where, when and how you save is important and often at the forefront of people's minds. Luckily, most people realise that this is impractical and unrealistic, as well as absurdly insecure to stuff it under the mattress. So, many investors are instead turning towards - and enjoying the benefits of - the ISA.

Standing for Individual Savings Account, ISAs offer some especially appealing perks for the UK investor. The chief of which is, the tax benefits that come with taking out such an account. ISAs are available for both Cash savings and investments in stock and shares. The total ISA allowance for this year stands at £10,680. There are, essentially, three ways of making this amount up.

Firstly, customers can invest in a Cash ISA. Though there is no obligation to make up the rest of the amount with investments in shares, the maximum cash savings that can be placed in an account stands at £5,340. Alternatively, the full £10,680 can be taken in the form of investments in stocks and shares. Finally, there is the mix and match option where customers can take up a certain amount of their allowance with Cash savings before using as much, or indeed as little, of the rest as they desire for investing in stocks and shares.

The main benefit of Cash ISAs is the fact that you do not have to pay income tax on the interest your investment. This tax-efficient status ensures that, when you do withdraw, you are entitled to the whole of your original investment and 100 per cent of the interest earned on that original amount. Interest is earned on the savings throughout the financial year, which runs from 6th April to the following 5th April.

As with standard bank accounts, there is no substitute for taking the time to thoroughly research and investigate the myriad of options before discovering and selecting the right ISA for you. Someone with sufficient confidence in their investment decisions, for example, may choose to take out a stocks and shares ISA which enables the owner to select and purchase their own shares and decide where their money is invested.

Another option may be to look at a Self-Invested Personal Pension (SIPP). A popular branch of the personal pension tree, SIPPs allow users to make their own decisions from a full range of potential investments listed and approved by HM Revenue and Customs. Though some such investments are subject to a tax charge, a great many are more tax efficient. Remember, the eligibility to invest in an ISA or SIPP will depend on your individual circumstances, and they might not be around for ever as all tax rules may change in the future.

In terms of Cash ISAs, investors should consider taking the time to find out which account offers the best interest rate on savings, thus potentially providing the greatest potential amount of money and return on your investment. Be careful, though, the value of investments can go down as well as up and you may get back less than you invested.

To this regard, it may be worth exploring the pros and cons of moving your savings to keep receiving the best deals. Though more complex than switching between standard savings accounts, new investment vehicles should do most of the hard work on your behalf and, providing the savings amount remains intact, the tax efficiencies should also carry over.

With a bit of research and the right decision, you can soon see your savings swell and, most importantly, keep these profits for yourself. It is, after all, your hard-earned original investment, so enjoy watching your funds grow without resorting to that old mattress or briefcase.