By Louise Greenwood
BBC Radio 4's Money Box
M&S is launching a cash ISA
Financial providers have been increasing the interest they pay on cash ISAs in an attempt to attract new savers, and several banks, building societies and supermarkets are now vying for top place in the best buy tables.
Each tax year every adult can put up to £3000 into a tax-free ISA (Individual Savings Account), and since they began in 1999, cash ISAs have proved the most popular type, with more than £70bn saved in them.
Last year a Safeway ISA was among the most popular products.
Now Marks & Spencer is launching a cash ISA, and it is offering one of the best deals, 4.5% interest, with a guarantee to keep the rate 0.5% above the Bank of England rate, at least until April 2005.
Alistair Milne, Marketing Director of Marks & Spencer Financial Services said there were no plans to let the rate drift down once it has customers signed up.
He told the programme: "That is not something Marks & Spencer would condone."
Unfortunately, not all of the providers with the best rates allow customers to transfer their money in from other accounts.
Marks & Spencer does, but Mr Milne admitted there can be delays of up to 30 days, during which time customers miss out on interest on their savings.
He insisted other providers are to blame:
"Unfortunately, most of this rests with the company that is transferring the money across to us.
"We are entirely reliant on their own processes being able to keep the customer as advantaged as possible."
However, Marks & Spencer's ISA does not have the best rate on the market.
Internet bank Intelligent Finance (IF) has announced it is putting its ISA rate up to 4.6% from the 20 February.
But IF's guarantee is only to pay 0.3% above the base rate, and only until February 2005. IF's ISA is available for telephone or internet banking.
Time will tell how many other providers are prepared to join the battleground.
BBC Radio 4's Money Box was broadcast on Saturday, 14 February, 2004 at 1204 GMT.