Move Your Money’s Best Buy ISAs

If you are a taxpayer, then at least 20% of any interest you earn on ordinary savings goes to the Government. Cash ISAs (Individual Savings Accounts) are simply savings accounts where the interest isn't taxed. The UK government introduced them in 1999 to encourage people to save. ISAs are tax-free savings or investment accounts offered by banks, insurers, asset managers, building societies and National Savings & Investments (NS&I).

Every saver should make the most of ISAs because some offer higher rates than ordinary savings accounts, and the interest earned is exempt from income-tax. Just like normal savings accounts there's a variety of cash ISAs available, such as instant-access, fixed-rate, and accounts with base rate guarantees. All UK residents aged 16 or over can have a cash ISA, although you must be 18 before you can open a stocks and shares ISA.

Cash ISAs like those listed above carry no risk. You can also have a stocks and share ISA, however, which does involve some risk: your savings may increase or decrease in value as the price of stocks and shares changes. Which? 5 Steps to Finding the Best Cash ISA

The overall ISA limit for the 2012/2013 tax year is £11,280, of which £5,640 can be placed within a cash ISA. These limits will rise each year in line with the Consumer Prices Index (CPI), rounded to the nearest £120. The ISA limit for 2013/14 will be £11,520, of which £5,760 can be held in a cash ISA.

Opening a cash ISA is straightforward. Once you've found the best account for you, you usually just need to fill in an online application form on the bank or building society's website. Otherwise you can fill in a paper form in branch or by post, with the forms available in-branch or by phone.

If you want to move money that's already in an ISA, you'll need to transfer the money in that ISA into your new one. See below for how to do this.

Yes. You can move all or part of previous years' ISA savings to an account with any other ISA provider that accepts transfers, and this will not affect your ISA allowance for the current tax year. All Which? Recommended Providers allow transfers in.

While you're only allowed to hold one 'active' cash ISA per tax year – that is, an account into which new ISA money is being paid – you can hold multiple 'inactive' ISAs from previous tax years.

If you want to move money from one ISA to another, your old and new ISA providers need to arrange the transfer between them directly in order to protect your savings' tax-free status. You'll need to complete an ISA transfer form, which will include a note to be sent to your existing ISA provider.

The key point to emphasise is that you should never just take the cash out of your existing ISA account and pay it into a new ISA – if you do, you'll lose your ISA's tax-free status. Let your old and new provider do the transfer for you. Which? Switching Your Cash ISA 

If you decide to switch, watch out for pitfalls:

• not all ISA providers allow you to transfer in ISA savings from previous tax years

• some ISAs (such as notice accounts) will impose a transfer penalty if you withdraw your money without giving sufficient notice

• some fixed-term accounts won't let you access your money early. With other fixed-term accounts, you'll be hit with a penalty if you want to move your cash before the fixed-term period is up

AER is annual equivalent rate and shows how much interest you'll receive in one year.