Also, you can have a cash mini ISA with one company and a stocks & shares mini ISA with another. This is useful as investment companies, which traditionally offer stocks & shares ISAs, often don't offer great interest rates on cash ISAs. The best cash ISA rates are usually offered by banks and building societies.

Cash mini ISAs are by far the most popular form of ISA. More than 9m of us took one out in 2004/05, saving an average of around £2,200. By way of comparison, only 1.2m of us took out a stocks and shares mini ISA, investing an average of around £1,200.

MAXI ISA

You can only put money into one maxi ISA each year. You can invest up to £7,000 each year, in a mixture of stocks and shares or cash . However, you can only put a maximum of £3,000 in cash into a maxi ISA whereas you can invest all £7,000 in stocks and shares if you like. Most people who opt for maxi ISAs seem mainly interested in the stocks and shares component. In fact, stocks and shares account for roughly 98% of all the funds that go into maxi ISAs.

So which type should you go for? The main thing is to decide how much you would like to invest in stocks and shares. If you want to invest more than £4,000 then your better off going with a maxi ISA. If you're likely to invest less than this amount, then go for the mini ISA instead. This way, if you want to, you can be free to look around for a separate cash ISA provider to get the best rate possible.