Got more than £20,000 saved up? Here are accounts to open right now...

Good news for those who long to use cash Isas for a nest egg — rates are finally rising and the gap between ordinary accounts and cash Isas has narrowed so much there is not much between them.

This makes cash Isas a must for every saver as you can protect your interest from the taxman.

Last week competition heated up with Aldermore bank unveiling a one-year fixed-rate cash Isa at 5pc. And Shawbrook raised its rate to 5.01pc yesterday, quickly followed by oak-North at 5.02 pc.

Easy-access rates also look brighter with new providers coming in offering rates above 5 pc.

The rates paid on these accounts no longer lag so far behind taxable accounts that they are not worth bothering with. Now, there are more than four million accounts where savers are at risk of paying tax on interest, up by nearly a million over six months due to higher interest rates.

Now, basic-rate taxpayers are busting the personal savings allowance of £1,000 in interest on ordinary accounts without paying tax. For higher-rate payers, it’s £500.

With rates at 5 pc, you’ll pay tax if you have over £20,000 in ordinary accounts as a basic-rate taxpayer, or £10,000 for higher-rate payers. Your 5pc is only worth 4pc if one of the first, 3 pc if one of the latter.

The message is clear — use your £20,000 Isa allowance before April 5 so that your interest is tax free.

So where to start? First, don’t go to your current-account provider — its rates will be lousy.

Just look at them: Barclays 1.66 pc, NatWest 1.75 pc, Halifax 1.45pc, Santander 1.7pc, Lloyds 1.4pc on its easy-access cash Isas. HSBC pays 3.2 pc but only with the right current account and if you add to your Isa each year.

The only exception is Virgin Money which pays 4.76 pc and an unbeatable 5.25 pc fixed rate if you tie your money up for a year.

The big banks do higher rates, but you’ll have to move your cash in a year.

Halifax pays 4.1 pc on its

Isa Bonus Saver if you make under four withdrawals. But after a year your money is moved into its Instant Isa Saver, paying 1.45 pc.

other banks and building societies pay far more. Among the best are Zopa (5.08pc), Marsden Building Society (5.05 pc) and Charter Savings Bank (5.03 pc).

on one-year fixed-rate accounts oakNorth’s 5.02pc is top with a minimum £1 — or you can take interest monthly at 4.91 pc.

Rates on two-year fixed rates are lower as the general level of interest rates is set to fall. If rates do fall, you may win out by picking a longer-term product, such as at Zopa (4.67 pc), Hodge Bank (4.62 pc) and Furness BS (4.6 pc).