Comparing ISAs before choosing one could mean a difference in returns of £129 for a Mini Cash ISA, according to the 2008 Moneyfacts.co.uk Mini Cash ISA Survey.
Assuming that the maximum investment allowed was deposited on the first day of the tax year, no withdrawals were made, and all interest was compounded during the year, Moneyfacts.co.uk found that the most competitive ISA
, from Alliance & Leicester, yielded the highest interest, returning a total of £250.58 on top of the initial investment.
The Cash ISA with the lowest returns, also from Alliance & Leicester, accrued interest of £121. However, to qualify for the ISA with the best returns, customers were required to sign up for the Alliance & Leicester Premiere current account.
The second most competitive ISA, from Abbey and with a return of £245.42, required that those wishing to invest in it were required to invest the same amount into an Abbey Guaranteed Growth Plan.
Rachel Thrussell, Head of Savings at Moneyfacts.co.uk, said: "For those looking for a straightforward no frills cash ISA, Barclays (£3204.23) came out on top with its Tax Beater account, but you needed to be quick to snap this one up, as it was withdrawn on 11 May 2007.
"Barclays has continued its strategy of offering a competitive tax free savings account this year, with its Tax Haven ISA paying 6.31 per cent gross, or 6.50 per cent AER when you take into account the monthly interest. If last year is anything to go by, this deal may not be on the shelves for long."
The survey also found that 36 out of the top 50 Cash ISAs were offered by building societies; the average return on a £3,000 investment in cash ISA was £164.51.
Halifax has issued a reminder to potential ISA customers who will be investing in a Stocks and Shares ISA
this tax year that different providers charge various fees for their management services, revealing that those who pay in £4,000 can save as much as £171.25 by being savvy about which provider they choose to manage their investment.
© Fair Investment