James Andrews, personal finance expert at Money.co.uk, said: “If you’re after a quick return on your money, investment Isas are generally not seen as the way to go.
"While you can make double-digit returns in a year by investing in the right stocks and funds, you can also make losses - and this particularly applies over the short term."
Isas - whether cash or stocks and shares - can be launched either with a lump sum or with a direct debit after opening an account with a nominal sum.
The income earned within an Isa wrapper (interest or dividend income) is income-tax free and any profits from investments are free of capital gains tax.
But while stocks and shares Isas can be a good long-term investment, thanks to market growth, Andrews said clients wanting to invest in this form of Isa would typically need "five or more years" to be confident in getting a better market return than on cash savings.
With interest rates so low, we have to be really disciplined about using cash.Holly MackayHowever, there is more risk than in a standard account, but also potentially far higher returns - especially with the exceptionally low rates on offer from most cash Isas at the moment.
Holly Mackay, chief executive of Boring Money, said it was a "rule of thumb" that, if a client needed the money within the next five years, they should not look at the stock market.
She said: "The risks of being a forced seller in a downturn are too high."
However, she qualified that by adding the shares or cash question was not necessarily "an either/or question".
Mackay explained: "The sensible approach is to mentally divide savings into shorter-term and longer-term pots of money. I think establishing a short-term cash pot and a longer-term Isa pot is the best approach.
"If you’re under 40 and saving for a property don’t overlook the extra boost you get from the government on both cash and stocks and shares Lifetime Isas.
"And of course if your timeframes are until retirement, it’s hard to overlook the nice free top-ups of cash that pension contributions get you from the government."
A further consideration is the record low interest rate environment in the UK - with the Bank of England base rate at 0.1 per cent and savings rates on cash Isas and cash savings accounts also low as a consequence.
Mackay added: "With interest rates so low, we have to be really disciplined about using cash – and only keep what we need access to within five years in cash."
She said cash could not simply remain the "default" position, adding: "Cash is a bit limp at the moment and so it has to be a purposeful choice rather than something we do simply because stocks and shares go in the ‘too hard basket’."
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