Saving money has rarely been more important. In these times of austerity and economic uncertainty, millions of us have taken advantage of ISA accounts, which allow people aged 16 and above to save money and enjoy tax-free benefits.

In good news for savers, it was confirmed by the government last October that from April and the start of the 2011-12 financial year, savers will be allowed to deposit an additional £480 a year into their ISA account. Starting on April 6th, savers will see their limits increase from the current £10,200 to £10,860.

The change is to reflect a rise in the Retail Prices Index (RPI), with any future allowance changes to be set according to fluctuations in the index, with this revealed on an annual basis each September. Last September's RPI stood at 4.6 per cent, which translated to an ISA limit increase for 2011-12 of £480. This step was drafted into government legislation during last June's emergency Budget, aimed at making saving more appealing.

Searching for the best ISA is something that the majority of Britain's 20 million account holders will have done. The most savvy of these will compare ISAs at the start of each financial year to ensure they're benefitting from the best interest rates. Not only this, they want to make sure that they're in the best position to make the most from the increased allowance.

Commenting on the increased allowance, a Treasury spokesperson explained that the government is "committed" to encouraging people to save and to taking the appropriate measures to allow this to happen.

"The Budget announced that the amount savers can pay into their ISAs each year will increase with inflation," the spokesperson explained.

"We can now confirm that savers will, from 6th April 2011, be able to pay an extra £480 into their ISAs each year, including an extra £240 into their cash ISAs."

ISAs can broadly be classed into two different categories; cash ISAs and stocks and shares ISAs, the latter of which is only available to those aged 18 and over. A cash ISA is similar to a standard savings account but, providing you meet the account's conditions, you don't have to pay any tax on your interest. These tend to be offered as either a fixed-term or fixed-rate account.

Stocks and shares ISAs, by contrast, allow a saver to invest in the stock market. All your money will be invested here, so savers are reminded that there is risk involved; the value of your deposit will fluctuate according to the stock market's performance, so you could end up with less money than you started with. If you're fortunate enough to make a return, you'll be pleased to learn that your profit is exempt from capital gains tax. You may, though, have to pay other types of taxes.

Understandably, cash ISAs are the most popular option. According to HM Revenue and Customs, 11,906 cash ISAs were taken out in the 2009-10 financial year, compared to 3,017 stocks and shares ISAs. According to Moneyfacts, however, savers are missing out on as much as £1,300 in interest payments every year by investing their money in accounts with low interest rates.

According to the financial website, a number of banks are reducing interest payments on older, existing accounts at the same time as launching new ones, which are designed to tempt new customers with both higher interest rates and the greater allowance coming into effect in April.

Speaking to the Telegraph, Moneyfacts' Michelle Slade said that large numbers of people are "sitting on sizeable savings" thanks to the introduction of ISAs 12 years ago, but encouraged savers to shop around to secure the best interest rates.

"While it makes sense to check you're getting the best rate you can on any new ISA, the priority should be to make sure your existing ISA savings are still earning a fair rate," she commented.

According to Moneyfacts, the average cash ISA account holder earns just 1.7 per cent on their investment. While some accounts pay as much as 3.2 per cent interest, others offer a paltry 0.1 per cent; so it really does pay to shop around.

As Ms Slade went on to explain to the newspaper, these difference can result in varying returns, particularly for those with large investments. In some cases, she explained, the difference can be as much as £1,300.

If you've successfully shopped around and have selected the best ISA for your circumstances, you probably want to learn a little more about how they work. Limits aside, there are a number of other points to bear in mind. For example, if you withdraw money from your cash ISA, are you able to deposit it back into the account at a later date?

The short answer is yes; providing you don't exceed the ISA allowance. Remember that it's not your account balance that matters here; it's the total amount of money you have invested since you opened the account.

Perhaps you already have an ISA account but are unhappy with the rate of interest it offers. If this is the case, and you have found another account that accepts transfers without your allowance being affected, you can transfer a proportion or all of your investment into a new ISA. Remember, though, that you shouldn't withdraw the cash before depositing it into the new account; you should arrange for the money to be directly transferred between accounts, otherwise you'll have the nasty surprise of losing your tax relief.

ISAs represent an excellent way of getting the most from your savings. Considering the taxman normally takes 20 per cent of the interest earned on standard accounts (40 per cent if you're a higher-rate taxpayer), it makes sense to open an ISA account. And, providing you've opened an easy access ISA, the myth that you won't have access to your money can be dispelled; this accounts work just like standard savings accounts, so if you need to get your hands on the money, you're perfectly entitled to do so.