The number of savings accounts being sold has increased, it has emerged.

Individual savings accounts reached new highs in 2006 when the number sold hit a new record, figures from Datamonitor have shown.

Jason Hollands of Foreign Colonial Investments states that one of the reasons individual savings accounts have been so popular is that they are more attractive than a regular savings account .

A tax-free mini-cash Isa [individual savings account] is certainly more attractive than a standard savings account and returns have improved over several months thanks to interest rate rises, he comments.

Published by the Investment Manager Association, figures show that fund-based individual savings accounts have declined in popularity, with cash individual savings accounts being the most popular investment with investors.

Mr Hollands comments that this may not reflect an increase in savings and investments by British consumers, but just a better alternative to normal savings accounts.

When investors begin to move back into the markets and away from cash, a better prediction of long-term savings will be possible, he adds.

It has also emerged that the Foreign Colonial Investment Trust has been acquiring cheap shares in the wake of the credit crunch.