'Choose cash Isas for short term saving'

Those looking ahead to the summer holidays already and hatching a plan to save up some extra funds, will do well to invest their money in an Individual Savings Account (Isa), according to one financial services provider.

Legal and General have pointed out the favourable rate of interest available for a cash Isa and recommended the account for those putting aside money for the near future.

Adrian Boulding, wealth policy director at Legal and General, explained: "If you are saving short-term, for example for next summer’s holiday, then a cash Isa would be ideal.

"The rate of interest you get on them is among the best of the rates of interest at the building society and it’s tax free, whereas with a normal building society account there is a basic rate of tax deducted before you get it."

For the medium to long-term, stocks and shares Isas - which offer the potential of a greater returns than a cash Isa - can be a rewarding option to take, according to the firm.