As interest rates on standard savings accounts continue to fall, investment in the form of stocks and shares ISAs, which allow a total investment of £7,200 per tax year could prove a more fruitful option for investors.

The deadline for investing into an ISA is April 5, and Dr Stephen Barber, head of research at online broker Selftrade says that: “The economic and market downturn has meant that many investors are both more cautious and seeking flexibility.”

And, according to Dr Barber, Self-Select stocks and shares ISAs offer flexibility and choice, which managed ISAs perhaps cannot. He added: “A common misconception of ISAs is that they need to be invested once subscribed.

“But the flexibility of these ISAs means that investment timing is in the hands of the holder.”

Speaking of ways to make the most of a Self Select investment ISA, he added: “One method of handling volatility in the markets, for instance, is to drip feed funds, regularly over the course of the year thus taking advantage of pound/cost averaging.”

Speaking of what to invest in, Dr Barber said: “Self Select ISAs allow choice across a range of direct shares, investment trusts and OEICs, ETFs as well as bonds and other products.”

However, he added that there are a number of managed ISA funds which are relatively lower risk, particularly multi-manager funds which diversify across leading funds.

“While there remains the risk of further market downturn, key to all of these choices is diversification and planning for the long term.” Dr Barber concluded.

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