A cash ISA should be the first home for your savings. Getting a great rate of interest is important, but when shopping for an ISA there are other factors you should also consider.

You can save up to £3,600 in a cash ISA in the 2008/09 tax year and with interest from your money protected from the taxman, it makes sense to open an account sooner rather than later.

When it comes to picking the best ISA, interest rate is important as obviously you want your money to go as far as possible.

But remember that not all ISAs give you instant access to your cash. Plus, not all accounts allow you to transfer money from a previous year’s ISA without affecting your yearly allowance.

What’s out there?

When picking an ISA, the first thing to decide is whether you want to fix your interest rate or opt for more flexibility with a variable rate.

If you want to secure the interest rate you earn on your savings, and are happy to lock your money away for a set period of time, then a fixed rate ISA might be for you.

ISA rates have had an odd year so far. Since April 2008, there has been a host of competitive fixed rate deals available, but a few months ago some providers started to pull these products and experts warned the tide had turned. However, for those yet to invest their ISA allowance, there is still a lot to play for.

Fixed-rate 

Bradford & Bingley, which is now owned by Santander, pays 6.25% AER on its one-year ISA, but this account can only be opened if you have the full £3,600 to deposit. As transfers are not allowed, you will have to be able to put away your full ISA allowance in one go.

Halifax offers several fixed-rate ISAs, which you can fix for one-year, two years, three years or four. The one-year deal has the best rate of interest -5.5% AER - with the others paying 5.45%. To open any of these accounts you need to have £500 to deposit upfront, and transfers are accepted. 

Halifax offers offers another fixed-rate ISA paying 5.75% AER for one-year - but you'll need to deposit £30,000.  

Variable rate

Interest rates on variable ISAs are a litte less competitive than fixed-products, and could go down further if the Bank of England continues to cut rates. But they do offer you more access to your funds.

National Counties Building Society pays 6.01% AER on deposits from £1, and transfers are accepted. This account also guarantees to be at least 0.4% above the Bank of Englanf base rate until 5 April 2009.

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• savings
• ISAs