Savers rush to utilise ISA limits, despite rates remaining low

The new tax year has only just begun and consumers have the chance to benefit from another year's ISA allowance. From April 6th 2010 consumers have been given an increased ISA limit of £10,200; £5,100 of which can be invested in a cash ISA.

Data from moneysupermarket.com, Britain's number one comparison site, reveals that the new rules are proving popular with consumers, with the site experiencing a 34 per cent increase in savings traffic during the first few days of ISA season, compared to the same period last year, despite the average easy access ISA rate is down 0.5 per cent from last years average rate.

However, even though we are in a low rate environment, consumers are clearly keen to find a good home for their savings, and those that take the time to search are likely to find some competitive deals. Santander has one of the leading rates, with its Flexible ISA paying 3.2 per cent. It's worth noting however that you can only invest this year's tax-free allowance and cannot transfer previous years' balance into this product.

Kevin Mountford, head of banking at moneysupermarket.com, said: "Making the most of your money is more important than ever when rates are struggling against inflation. Although this year, the rates on offer have been lower than we would have hoped, with very little movement expected in the market, savers would be better off taking out a product now to start accruing the interest immediately rather than waiting for a better deal at a higher rate. The large volume of traffic we have seen in April, suggests many savers have the right idea."