It's that time of year when banks and building societies normally start battling for savers to take out their cash Isas.

But experts are predicting that rates this year will be so poor that many savers won't be tempted.

Money put into past years cash Isas is likely to be earning equally disappointing returns too, unless they were fixed rate accounts. Often bonuses run out after about a year and savers have the annual hassle of having to move money to more competitive accounts. It could be a good time therefore to consider a switch to a stocks and shares Isa which can earn better returns over the long term.

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Basic-rate taxpayers who have put money into cash Isas every year since Isas were introduced 15 years ago are nearly £5000 better off and higher-rate taxpayers have gained more than £9000 by taking full advantage of Isas compared to leaving their money in standard easy access accounts, according to price comparison website

But returns on cash Isas have declined considerably. Jafar Hassan, personal finance expert at, says there is little to get excited about in the market this year. "Even locking away your money won't give you much to shout about with very few short-term, fixed-rate cash Isas offering more than the tax-free 1.75% savers can earn with easy-access accounts. As we near the end of February far fewer new cash Isa savings accounts have been launched compared to previous years."

The top interest rate currently being offered on instant access Isas, which are open to all, is 1.75%. The Britannia Building Society is offering this rate on its Select Access Cash Isa 2 account which requires a £500 minimum investment. But even this rate is below the current inflation rate of 2% which means money left in the account will lose buying power. And there are plenty of accounts paying less interest, such as Bank of Scotland's instant access Isa on 0.75%, the Clydesdale on 0.7%, or the Co-operative Bank on 0.5%.

Low interest rates mean that savers should think very carefully about how much money they really need to keep in a cash account for emergencies, such as unexpected bills, or for short term savings goals like holidays.

For other money that you are saving for the longer term, it may be a better idea to consider switching at least some of it to a stocks and shares Isa. Investing in the shares of companies gives your capital a chance to grow. If you invest through a fund there is a professional investment manager who manages your money and your risk is spread across a portfolio of shares of UK or overseas companies.

There is a danger that the value of a stocks and shares Isa can go down but financial advisers point out that if you take a five- to 10-year view, it is normally possible to ride out the fluctuations. The average UK investment fund, for example, has more than doubled in value over the last 10 years, despite the financial crisis of a few years ago.

David Thomson, chief investment officer at VWM Wealth, says: "The advantage of buying stocks and shares Isas is that you are tapping into the long-term growth of companies.

"The downside is that your money may go down in value for a day or even a year but generally over the longer term you are rewarded for taking the risk. With cash Isas, on the other hand, at current interest rates you are guaranteed to make a loss in real terms because of inflation."

Many investment funds ­investing in shares are now paying incomes that are ­considerably better than savings accounts. Cazenove UK Equity Income, for example, is currently paying a yield of 3.8%, JO Hambro UK Equity Income is paying 4.7%, while the yield on Artemis Global Equity Income is 4.1%. The income from these funds is usually paid out half yearly or quarterly, but it can be reinvested.

Other funds take a more cautious approach by combining shares, fixed income securities and other assets, and may be more focused on providing growth. Mr Thomson suggests Investec Cautious Managed as a good option. It recently celebrated its 20th anniversary and has achieved an average annual return of nearly 8% in that time.

In the current tax year, which ends on April 5, it is possible to invest up to £11,520 in a stocks and shares Isa. But you can also transfer cash Isas from ­previous years into stocks and shares Isas without affecting this year's allowance or losing any tax concessions.

The mechanics are simple - you request a transfer form from an investment platform such as Hargreaves Lansdown, FundsNetwork or Charles Stanley Direct, give them the details of your current cash Isas, and they will transfer them on your behalf.