From today the ISA allowance goes up from £10,200 to £10,680 and those who are quick of the mark could benefit to the tune of £748.
According to research by Fair Investment Company, if you were to invest the full £10,680 into a stocks and shares ISA today, based on growth of 7.00%, by the end of the tax year you could have £11,428.
"This figure just shows how much better off you can be by acting fast," explains Julie Smith, savings and investment analyst at Fair Investment Company.
"Every March and April there is a mad rush on ISAs, but these people who do leave it until the last minute could be missing out on hundreds of pounds in interest. While those who invest at the start of the tax year benefit from a full 12 months worth of interest on their investment, and as you can see, that can make a really big difference."
Julie says that for many, investing the whole allowance at the start of the season may not be viable, but encourages people to make use of their ISAs as much as they can because the tax benefits make them one of the most tax efficient ways of saving.
"If you can't afford to invest the whole amount at the start of the season, a monthly payment is a good way to invest. Based on the same growth (7.00%), someone investing the full allowance over 12 monthly payments would still see their investment grow by £401 to £11,081.
"For those who are only investing in a cash ISA, it is also beneficial to invest the allowance at the start of the season in order to gain maximum advantage," says Julie.
"For example, if you were to invest the new £5,340 allowance into a 3 year fixed rate cash ISA paying 3.74% interest today*, by the end of the tax year, you would have earned £200 in interest. If you continued to do this each year for the three year term, by the end, you would have invested £16,020 but your investment would be worth £17,248. And, of course, this is all tax free."
"If you can, it is worth investing your full ISA allowance, or as much as you can, now, because the longer you leave it, the less you'll earn," says Julie. "Take advantage of the new limits and use them to their full potential."
*Average rate on a 3 year fixed rate cash ISA is 3.74%: Moneyfacts, 05.04.11