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Growth of Isa and online access

Individual savings accounts (Isas) are proving more popular than ever with savers as over 12 million accounts were opened last year and nearly £31 billion has been invested into the tax-free government-backed accounts.


Parents with both personal equity plans (Peps) and Isas are advised to consolidate the two accounts under one roof to make the most of their money, according to a leading fund manager. F&C suggests that consolidating all accounts can help savers keep better track of their investments and it may also help reduce costs.


And now is definitely a good time to be saving. Following on from last month's successful figures, the market is still seeing rising rates for savers, according to industry experts. Those who can afford to tie up funds for six months or more are in the best position to take advantage of the best rates on fixed term accounts.


Many are already making the most of these rates and saving for the future as new figures show that in the first three months of this year, Britons saved six per cent of their earnings, the highest savings since 2001 but not quite reaching the record level set in 1979 where workers tucked away 14.1 per cent of their pay.

This increase in saving is also reflected in record levels of investment in the government's guaranteed National Savings and Investments (NS&I) accounts which saw a seven per cent increase over the last 12 months, resulting in some £73.4 billion being saved.

In child trust fund (CTF) news, cash accounts are proving popular as almost 75 per cent of
parents pick the tax-free cash CTF over the stakeholder option, with 409,000 cash CTFs being opened since their launch in April 2005 creating £147 million in total balances, £5.1 million just in the last month.

Furthermore, nearly a third of UK parents surveyed by a child trust fund (CTF) provider said they would be more likely to use their vouchers and to open an account if they could do so online. Some 1.48 million parents are missing out on valuable interest by not yet using their issued CTF vouchers.

Finally, the market seems to be opening up to investors who prefer to bank online with new deals coming out almost every week.

Britannia building society is offering its online and telephone-based DirectSaver account holders an interest rate that at least matches the base rate until July 31st 2007 which is currently 4.5 per cent gross on a minimum balance of £1,000.

And Birmingham Midshires has launched a "no nonsense" direct savings account, accessible by phone or internet, offering 4.75 per cent gross per annum.