Cash Nisas can be as simple to use as standard savings accounts, and you won't have to pay tax on the interest you earn. Learn more and compare rates.
Do you enjoy paying tax? No, of course you don't.
So it makes sense to use a New Individual Savings Account (Nisa), which comes with one incredible perk - the taxman can't touch it.
The interest you earn on your money is yours, and yours alone.
Unless you're in a tax-exempt category,† you pay tax on any interest you earn that's not inside a Nisa wrapper.
You may not even realise it because, unless you're a higher-rate taxpayer, it's deducted before you receive it. The bank or building society automatically siphons off 20% of your interest and passes it along to the taxman.
Higher- and top-rate taxpayers have to declare their earnings to the taxman so that they can pay the extra tax.
But all taxpayers can avoid this by saving into a Nisa.
Each year you have a Nisa allowance, which is an amount you can save into a tax-free account.
That amount resets every new tax year and, if you haven't used it, you lose it. The tax year runs from 6 April to 5 April the following year.
You can save the allowance amount into a cash Nisa and/or a stocks and shares Nisa without troubling the taxman.
The allowance for the 2014-15 tax year is £15,000. All of that can be in cash, or you can split the £15,000 between cash and stocks and shares in whatever proportion you please.
This is much less restrictive than the old Individual Savings Account (Isa) rules, where a maximum of half of the annual allowance could be put into cash.
There are as many kinds of cash Nisas as there are standard savings accounts.
In fact, the only real difference between a cash Nisa and a normal savings account is that the taxman won't take a cut of the interest you earn.
That means you can save in the best way for you. If you haven't put any money aside this tax year then it may make sense to start by using your tax-free allowance.
These tax-free accounts are only available to UK residents aged 16 and over. If you're under 16 or want to save for a child, then take a look at junior Nisas.
Most people use their Nisa allowance to make long-term savings. Once you've invested money into a Nisa, the taxman can't touch the returns until you withdraw it.
But even if you just want somewhere to keep your rainy-day fund, an easy-access cash Nisa could be right for you.
After all, if you're lucky then you'll never need to touch your emergency cash, so you may as well keep it in a tax-free account.
You can switch cash Nisas to find a better rate, you just need to transfer the money.
If you withdraw it then it stops being tax free and you can't reinvest it without using your current tax year Nisa allowance.
Your current Nisa provider is obliged to let you transfer money out of its account and into a better one, so don't let them put you off.
Often, your new provider will take care of this for you and will ask if you're transferring funds in when you open the account.
If it's the current year's cash Nisa then you'll only be able to transfer the entire amount, but with older Nisas you may be able to transfer just a part of the fund.
Having said that, not all providers accept transfers into new accounts, so you need to check that before opening a new account.
When you compare cash Nisas through Gocompare.com, you can clearly see whether an account allows transfers in. That should make it easier to choose the right deal.
If you've locked your money up in a fixed-rate bond cash Nisa, then you may have to pay a penalty in order to transfer the money into a new account.
Do the maths and make sure it's still worth it before going ahead.
It is possible to transfer a cash Nisa to a stocks and shares Nisa, and vice versa, subject only to the restrictions mentioned above.
If it's the current year's Nisa you'll only be able to transfer the full amount, and not all account providers will accept transfers.
You may be able to transfer partial amounts from previous years' Isas/Nisas, but again this will be subject to your new account provider's conditions.
Note that rules changed significantly on 1 July, 2014, when Nisas replaced Isas - before that date, it had not been possible to transfer from a stocks and shares Isa to a cash Isa.
Some accounts pay a bonus rate for the first year in order to tempt savers in. These can be a great way to earn a better rate.
But you should make a note of when you open the account and be ready to switch on the first anniversary.
If you're particularly savvy you can keep switching to a better account every year, comparing rates to find the best each time.