With their high interest rate deposit accounts, often paying out around 6 per cent free of tax, they have pulled in the majority of savers so far attracted to ISAs. Sales of life assurance ISAs, only sold by a handful of companies, have been slow to get off the mark, as was to be expected.
Halifax has pulled in over 500,000 ISA customers in the first two months of the new tax-free savings regime. In second place is probably the Abbey National, which has seen some 225,000 new cash ISAs being opened, attracting some pounds 600 million in deposits.
The bank has been spending over pounds 2 million on its ISA advertising and marketing campaign. "We put on a big push, concerned that the change-over to ISAs would create confusion and misunderstanding," says Gug Kyriakou of Abbey National.
"We have been pleasantly surprised at the results. Most of our customers, who would probably have taken out TESSAs in the past, have been taking out Maxi cash ISAs, with an average balance of pounds 2,200, which is much higher than we expected."
Also reporting sales better than expected is the Woolwich, which has seen some 60,000 ISA accounts opened. "These are mostly Maxi ISAs" says David Holcroft. "We are trying to advise our customers to have a balanced portfolio, so we find that around 80 per cent of the new ISA accounts are including a cash component."
When it comes to equities, the take-up of ISAs has been slower. The financial community always expected that, after the final push during the last ever PEP season, there would be a hiatus as investors get used to the new tax- free investment regime.
By far the most popular means of investing tax free in stocks and shares is through unit trusts and open ended investment companies (OEICs). Investment trusts and direct investment through self-select plans lag way behind.
The Association of Unit Trusts and Investment Funds (Autif), which is the trade body for the unit trust industry, has reported that members' gross sales of equity ISAs were pounds 556m in April. This was 16 per cent lower than last year's PEP-only sales. In total, the unit trust industry saw somewhere in the region of 670,000 equity ISA accounts opened during the month, the vast majority of them being Maxi ISAs.
"As with any new product, some people will inevitably prefer to hold back and see how things go before committing themselves," says Anne McMeehan, of Autif.
She points out that it is too early to read too much into just one month's figures. After PEPs were introduced in 1987, it took a couple of years and a number of changes, including widening the rules to allow investment in unit trusts and increasing the maximum investment levels, before sales took off.
"While sales were down on April 1998, we handled a huge amount of inquiries from investors, and sent out a huge volume of literature on ISAs," says Ann Davies, a director at Fidelity, the largest investment group.
"In May, a quiet month, sales were well up on last year. Overall, they are still down on the first two months of the financial year, which is just what we were expecting. Investors have some way to go on the learning curve and the first couple of months of ISAs being available has been time for them to gather information."
At Jupiter, the most successful group in attracting in PEP money last year, the expectation was that ISAs would get off to a very slow start.
"As they're more complicated, we felt that there would be a long gestation period. We expected sales would fall by half," says Stephen Glynn. "Instead, they are less than 20 per cent down, which means that we've probably gained market share.
"Our biggest surprise has been to see a 30 per cent increase in the numbers taking out regular savings plans with an average contribution of pounds 200 a month, similar to the level of our monthly PEP savings. Many, of course, have been conversions from PEPs - so far over 82 per cent of our regular savers have done this - but we have also taken on many new customers. Our income, growth and European funds have been attracting most of the investment."
Some groups, however, have reported much better than expected sales. "We have seen over pounds 160m invested in our equity ISA, around 80,000 new accounts," says Gug Kyriakou of Abbey National. "Much to our surprise most of those opening accounts knew what ISAs were and have chosen to invest in our UK Growth fund rather than a tracker fund. They seem to want the chance of outperforming the FT index."
Also going against the industry trend, Simon Wombwell of Newton, another well known fund manager, says: "Our ISA sales are better than our PEP sales were last year, up some 10 per cent. The vast majority are lump sum investments in maxi ISAs with the most popular investment vehicles being our Income, Higher Income, European and High Yield Bond funds."
It would appear, so far, that most ISAs have been taken out through tied sales forces, as with the bancassurers, or by direct investment. This is certainly the case with cash ISAs and applies to some 70 per cent of equity ISAs. Only around 30 per cent of equity ISAs have been purchased through independent financial advisers, almost a reversal of the way PEPs were bought.
"The past few weeks has been busy, although not manic" says Roddy Kohn of Kohn Courgar. "Those clients who are keen to get on with things have mostly been investing lump sums through Maxi ISAs."
Jason Hollands of BEST Investment, a firm which recently shocked competitors when it announced that it would be charging the same price as execution- only firms, returning any commission to clients, while continuing to offer advice, always expected this to be a quiet period.
"Most investors are PEP fatigued. They have also been bombarded with mail shots and are trying to work out what ISAs mean, what CAT standards are, the differences and benefits to them. This is usually a quiet time of year anyway, so I'm not surprised that sales have fallen off. But once people get back from their summer holidays, I expect things will return to normal."