Finance Physician here with a timely reminder; you don't have to let the nasty tax man take all your hard earcned cash! Stick it in an ISA!!

The ISA (Individual Savings Account) season is almost over and it's your last chance to choose your ISA for the current tax year. Every year we are each given a £7,000 annual allowance to invest in an ISA where our money will grow tax-free. And it's a case of use it or lose it.

If you miss the April 6 deadline your allowance for this year is gone. However, if you're among those yet to decide what to do with their ISA allowance, it can be daunting trying to work out where to start.

What is an ISA?

Basically an Individual Savings Account (ISA) is a tax-advantaged means by which you may save and invest without incurring income or capital gains taxes on the proceeds. (yippee!)

As part of the ongoing government initiative to encourage saving, ISAs were launched in 1999, designed to be simpler, more flexible and appeal to a wider market than their predecessors, TESSAs and PEPs, with the guarantee to remain available for at least 10 years. Opinion is divided over whether the ISA succeeded in its aims and new regulations are on the way.

An ISA is not an investment in itself, but a tax-efficient wrapper. Within the ISA wrapper you can invest in a combination of the following types of asset: cash deposits, stocks and shares and life assurance investments.

Under the existing ISA rules you can either invest up to £7,000 in a stocks and shares maxi ISA, or £3,000 in a cash mini ISA and £4,000 in a stocks and shares mini ISA.

Cash ISAs

Cash ISAs offer a safe way of saving money in the short-term and are usually taken through banks and building societies. You only need to be 16 to open one of these.

Most pay around 5% interest (about the same as a normal savings account) but you can shop around and find higher rates. Although the returns aren't spectacular, at least you know your money is safe -which is jolly important when everyone else and his dog seem to be after your pennies!

With over 180 cash ISAs currently available, with varying terms, conditions and rates, you should easily find an account suitable for your needs and saving habits.

Cash ISAs provide risk-free savings, some offering instant access to funds while requiring minimum deposits as low as £1 and some even offer you a cash card for cash withdrawals.

Stocks and shares ISAs Stocks and shares ISAs allow you to invest in unit trusts, investment unit trusts, shares listed on a recognised stock exchange, bonds and gilts and life assurance. This type of ISA is good if you are able to leave your money alone for a long period of time, usually five years or more, and are comfortable taking on the risk of market fluctuations in the value of your investment.

It is best to take professional advice before deciding on an equity ISA and what you will put in it. ISAs advertising high income may also carry risks and may not be able to sustain the level of income advertised without eating into your capital. Or they may offer a higher potential rate of return because they invest in riskier underlying investments, such as high-risk bonds.

Things to consider when picking an ISA!

There are two main things to consider when choosing an ISA. The first is your attitude to risk; if you want a low-risk investment, a cash ISA is best but if you are prepared to risk your capital, then an equity ISA could be for you. If you choose an equity ISA the second thing you will need to think about is your investment goals (how long you want to invest for and whether you want growth or income), and then do some research to identify markets and sectors that meet your risk profile.

So what are you waiting for? Start saving and keep your hard earned cash away from the horrid old taxman.

But be quick or you will miss the deadline....(April 6th remember) Bye for now!