As the end of tax year looms on 5 April, time is running out to use up this year's Isa allowance. Should you be rushing to beat the deadline? Are they worth it?

What's the hype about?

If you have opened a newspaper in the past few weeks, the chances are you have seen an advert encouraging you to invest in an Isa. But what are they?

An Isa is simply a tax efficient "wrapper", which allows you to shelter up to �7,000 a year from the tax man.

But what does tax efficient mean?

Ordinary (non-Isa) savings and investments are usually subject to Capital Gains Tax (CGT) and Income Tax.

But when you realise any gain from an Isa or cash it in, you do not pay either CGT or income tax.

The main advantage of investing in an Isa is the saving on income tax, especially for higher-rate tax payers.

Investing in an Isa also saves on paperwork, as you do not have to declare any gain from your Isa on your tax return.

Am I old enough to buy one?

You can invest in any kind of Isa if you are over 18 years old and a resident for tax purposes or a Crown employee currently working overseas and treated as resident.

You cannot hold an Isa jointly with anyone else or hold one on behalf of another person.

Since April 2001, you can take out a cash ISA from the age of 16.

Don't get your minis and maxis mixed up

You have probably heard of minis and maxi Isas, but what is the difference?

Watch out for those adverts!

Advertising space does not equate to big returns Be wary of words such as "top performer" Check the small print Past performance figures may look impressive, but they do not guarantee future returns

With a mini Isa, you split your money up before you invest it. You can have a mini for all three parts of your Isa, either with the same provider or three different ones.

The limits are �3,000 in cash, �3,000 in shares and �1,000 in insurance. But you don't have to buy three minis - you can just have the one or two if you want.

Alternatively, you can invest �7,000 in a maxi Isa with one company.

The company may allow you to diversify your investment and split the Isa, so that you can put up to �3,000 into cash savings and �1,000 into insurance.

What happens if I don't follow the rules?

You can't mix your minis and maxis in the same tax year, or the Inland Revenue will not be pleased.

If you already have a mini Isa this year it is tough luck - you can't take out a maxi and vice versa.

How can I save money?

If you are investing in a stocks and shares Isa, you can expect to pay an initial charge of between 3% and 5% and about 1.5% annually after that.

One way of saving money is by going to a discount broker.

They don't give advice, but just buy the Isa for you and then rebate part of the commission back to you.

If you want to take out a mini cash Isa, you can find out about the best rates through Moneyfacts (see link).

The government has introduced something called a Cat mark, which will minimise the charges you pay.

However, buying a Cat-marked Isa may guarantee low charges but it does not guarantee performance.

How do I know if it is a good fund?

There is no definitive strategy to investing.

The stock market has had a torrid time over the last couple of years, and people might be put off investing in shares.

In fact, this year's Isa sales have been abysmal compared to previous years.

But advisers say that any stock market investment should be a five to ten year investment.

Do I have to invest in one?

There is no compulsion on investors to use their Isa allowance.

Advisers warn people who are not certain about putting money into the stock market, or who are unable to shoulder potential losses, to opt for a mini cash Isa.

Remember that if you invest in the stock market it will be tied-up.

You should ensure that you have easy access to savings as well.

What about those adverts?

There are lots of adverts at this time of year, but these do not necessarily mean the products will make you rich.

You should be cautious of words such as "top performer" and performance rates.

Some fund managers have been known to brag about a fund's performance, even after the fund manager who built-up that track record, has left.

Where can I get further information?

If you are unsure about whether a firm is authorised to sell investments, you can check with the FSA's consumer helpline (0845 6061234). The FSA also has a series of consumer guides and comparative tables on its website (see link).

Proshare provides information on a range of stock market investments, as well as a forum for expert and novice investors (see link).

Several financial advisers and brokers publish their own newsletters and magazines, such as Chase de Vere, Torquil Clark and Best Invest.

These will help you track your fund's performance and compare these to other schemes.