(Slim) bonanza for the over-50s!

Today's the day. You lucky older peeps can now put £5,100 each year into a cash ISA if you wish. And there's no shortage of choice. There are plenty of great Q&A sheets and comparison sites on the web that'll put you in the picture, and answer any question you may have.

Except this one. Why do the rates stink?

You may well ask. The average cash ISA rate is now a ghastly 0.41%. Adverts for cash ISAs all read something like "Pick up a great tax-free rate with instant access!" Well, I don't call 0.41%, or even 2-3% if you shop around, a great rate, tax or no tax.

So what's going on? I have a theory. Have you tried to open or move an account recently? The bonkers money-laundering rules that the government have spent years embellishing have made it ridiculously difficult; you will generally need to send off two pieces of identification including passport, if you trust the Royal Mail (which I don't) or a notarised copy of your passport.

Obtaining these is time-consuming and expensive, and therefore a barrier to changing at all. Banks love inertia. They have long used accounts which gradually erode your rate of interest; witness Nationwide's e-Savings, which now pays virtually nothing; if you want money you'll have to open e-Savings Plus or the slightly barmy Champion Saver. And next year something different, no doubt.

So ISAs are a godsend to them. You can't take your money out or you lose the tax advantage; and as already noted accounts are difficult to shift between banks. If you don't put money in each year then you'll lose the tax shelter for that year; so banks, ever logical, are offering rates less than those you'd get if you paid the tax on a normal savings account.

So what to do if you want to stick to cash? Shop around. There are still a few reasonable rates, particularly if you're happy to lock your money up for a while. Bradford & Bingley 2 Year Fixed Rate Postal ISA offers 3.75% for example. Now I'm not offering advice, and rates can go down as well as up etc., but I think two years is long enough. These woeful rates can't last for ever. Can they?