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Individual savings accounts (ISAs) are a type of savings account that was introduced in 1999 by the government in order to replace the TESSA and PEP accounts. You can invest up to £7,000 annually in investment instruments that are tax-free in nature.
There are three types of individual savings account namely:

1. Maxi ISAs – It lets you invest £7,000 with a single provider. You can divide the money into two or three components as per your requirements.
2. Mini ISAs – It lets you invest with two to three providers across components like insurance, stocks and shares.
3. TESSA only ISAs – This type of ISA can be availed when a TESSA expires, the principal amount, other than the interest can be invested again in cash or TEESA only ISA without taking into account the annual ISA limit.

While finding the best individual savings account, you need to find out the interest rate the ISA provider is offering. You should go for a one that provides a reasonable rate throughout the period of using the account.

Initially banks will provide new customers with high introductory rate for a time period of six months or a year. Once the time period ends, you may have to deal with low interest rates. Hence, you need to compare the rates offered by different banks and read the fine print well before choosing a provider.