Since their launch in April 1999, Individual Savings Accounts (ISAs) have gone from strength to strength. By 2000, the British public had £29bn stored in ISAs; fast forward seven years and that amount has rocketed to an astonishing £208bn. That is almost as much as the amount currently owed on credit cards and non-mortgage debt combined.

ISAs allow people to save as much as £7,000 per tax year (this will rise to £7,200 from April 2008), without having to pay income or capital gains tax on the amount saved. At present, you can pay up to £4,000 each tax year into a stocks and shares mini ISA, and/or £3,000 into a mini cash ISA. Or you can put up to £7,000 in a maxi ISA, splitting your investment into stocks and shares, and cash (with a cash limit of £3,000). You can have one or two mini ISAs, or a maxi ISA, but you can’t have a mini and a maxi ISA at the same time, currently limiting your yearly investment in ISAs to £7,000.

From April 2008, this system will be simplified, with the often confusing distinction between mini and maxi ISAs getting abolished, and accounts being re-designated as "cash accounts" and "stocks and shares accounts". You may have already invested your full allowance in ISAs for this tax year, or perhaps the current confusion over various ISA accounts has put you off altogether. However, if you have money to save, now might just be time to think about jumping on the ISA bandwagon.

Fixed rate cash ISAs may be a particularly compelling proposition right now because interest rates are relatively high. With five interest rate hikes since August 2006, the current Bank of England rate of 5.75% is good news for savers - many cash ISAs, for example, are now offering tempting rates of between 6 and 6.25%. Of course, how long this will last is debatable, and depends on what further developments we will see with interest rates. Some analysts this year predicted that rates would rise again, perhaps to 6% before the end of 2007. Earlier this month, however, the Bank of England warned of an economic slowdown in 2008, leading to analysts forecasting a drop in interest rates - perhaps by half a point - next year.

If interest rates do fall as now predicted, the advantages of getting a fixed rate cash ISA sooner rather than later are fairly obvious. Not only will you be able to sit back and enjoy a favourable 6% to 6.25% interest rate, but you’ll continue to profit while the Bank of England rate falls (and savings accounts with it) to perhaps 5.25% or lower. Of course, there’s always a risk in opting for a fixed rate: if interest rates go the other way, and rise, you may be frustrated to find you’ve missed out on even better savings deals in future. But at least with a fixed rate, you know what you’re dealing with, and you can look forward to knowing exactly what the financial return will be at the end of the fixed rate deal. And where your precious savings are concerned, it’s perhaps the best advantage of all, to know exactly where you stand.