In the current economic climate the Bank of England base rate has fallen to an all time low meaning that many related savings products are offering poor returns for any potential investors. Along with this, instability amongst many of the top financial providers has left savers hesitant about investing and wondering where to invest.

The continued instability of some financial providers tied in with the low interest rates being offered to investors has left some savers believing that the best place for them to keep their funds is under lock and key in their own home! However, for any savers thinking this it isn’t all doom and gloom and there is good news on the horizon with regards to savings opportunities. Variable savings accounts are still seen as high risk products and rightly so with world markets and interest rates changing regularly. The good news though is that for more conventional savers higher interest rates are now being offered on fixed rate savings products. Even better news is that the higher rates are being offered by some of the more consistent and secure financial providers. Currently West Bromwich building society provides one of the highest fixed rates around at roughly 3.44% after tax with a minimum investment of £5,000. There are also a number of similar rates being offered at present by alternative financial providers making fixed rate savings products much more attractive than any variable products, as long as you are willing to have little or no access to your invested funds.

For anyone investing funds either in regular savings accounts or an isa such as a cash isa fixed rate products are at present the safest bet.

Studies show that most Brits fail to make the most of their individual savings accounts allowance.

A large number of those that have individual savings accounts (ISAs) are not taking full advantage of the tax free benefits available through these products.

According to Guy Simmonds, marketing controller for investments at Nationwide, only a third people who make use of a Nationwide ISA are saving the maximum cash ISA allowance (£5,100).

Mr Simmonds also said that figures collected from Nationwide showed that around a fifth of Britons are failing to put any savings aside into savings accounts.

“Why they are not saving could be [down to] a whole host of reasons from not having a disposable income because of the current economic climate, to not trusting banks or building societies with their money,” he claims.

However, older people appear to be more receptive to making provisions in online savings accounts and other types of ‘nest eggs;’ with the figures indicating that there is “a very high proportion of savers aged over 50″.

Meanwhile, studies carried out by Saga showed that since the ISA allowance increased for the over-50s last October, 41% made full use of the new tax-free limit.

Savers could be missing out

Many savers starting off will search for the best ISA rates, but the high rates offered tend to only last for 1 year, unless the account has a fixed rate for several years. This means that once the bonus period expires, the ‘first attractive’ rate drops to a less respectable offer.

The problem comes when savers lose track of what is going on with their account, earning way below average on their savings.

To avoid this, it is recommended that saver review their ISAs at least once a year (unless they have opted for a fixed rate ISA), and if necessary switch to a higher paying account.

Some fixed rate accounts pay over 4% if you’re willing to lock your cash up for a few years in a fixed rate account, but if you want an account that allows you to access your funds when you need them without being penalised for doing so, consider the Nationwide ISA, offering 2.25% AER (over 4 times the current base rate) with instant access to your funds.

However, if you really want to make your savings work for you, you may be happier to go for a fixed rate ISA. Nationwide’s Champion ISA pays 4.4% based on a three-year fixed term, while the one-year fix offers 2.75%.

Andy Hutchinson, Nationwide’s head of savings, said: “With Champion ISA, savers are safe in the knowledge that they will not have to chase competitive rates round the High Street, as Nationwide will do that for them.

“For those who prefer to manage their accounts online, we have also launched the instant access online e-ISA paying a competitive interest rate.”

When it comes to investing your money, earning and saving are top priorities. And the money you invest is likely to have already been subjected to income tax- so why would you allow your accrued investment interest to be cut by taxes yet again?

The truth is, you don’t have to. That’s because there is a safe, simple and flexible way to invest without losing a portion of your hard-earned savings to taxes: ISAs, or Individual Savings Accounts. An ISA is a tax-privileged savings account that’s designed to effectively help you earn from your savings – which means that the whole amount you place in the savings account is subject to accumulate entirely tax-free interest. Investing your money in a cash ISA gives you the opportunity to save thousands of pounds a year without paying UK Income Tax on the interest you earn. And with the right ISA provider, you’ll also benefit from a highly competitive rate of interest and the convenience of managing your account in person, by phone or online.

With the end of the tax year approaching, many people will begin to consider investing in ISAs. So what are top investment features to look for? It’s important to keep in mind that the best cash ISAs on the market are those which are flexible, easily accessible and offer the most competitive tax-free variable interest rates.

If you’re considering investing in an ISA, you’ll find various financial institutions, like National Savings and Investments, which can provide a range of flexible and high interest ISA account options – from cash ISAs to ISA investments in stocks and shares. You can even gain access to a comprehensive investor’s guide online, explaining ISA product options, associated interest rates and expected tax-free savings.

ISAs are a great way to build your savings without having to pay taxes on your earned interest; and you can take advantage of the highest tax-free rates available to optimise your earnings. Moreover, any taxpayer aged 16 or over is eligible to start an ISA account with as little as £10 – so saving can begin early.

The income you receive from working has already been taxed once. So why let yourself be taxed on the interest earned by the savings you manage to put away? Simply invest in an ISA, and start to benefit from the money you invest.