Today millions of people will be dashing to the bookies to have a flutter on the Grand National. But in their haste they may miss the chance to profit from a certain winner: the tax breaks on an Isa.

The deadline for using this year's £7,000 Isa allowance is midnight tonight, only hours after the horses have raced round the famous Aintree course. And if you do turn your attention to investment rather than the turf, there will be no shortage of financial groups ready to assist you. But with only hours to the deadline, you will have to act fast.

It is too late to send in your application by post, so your choices are limited to the telephone, online or hand delivery. Some Isa managers, such as New Star, Fidelity and Jupiter, are opening special drop-off points. Abbey will have more than 205 bank branches open until 6pm on Saturday to cater for the last-minute rush.

One way of beating the Isa deadline from the comfort of your sitting room is to apply online, though you will need to check what your manager is offering. Some Isa managers, such as Alliance Trust Savings, L&G and Hargreaves Lansdown, will be handling online applications right up to the midnight cut-off point. Tom McPhail, of Hargreaves Lansdown, says: “Last year our final Isa customer completed his application at four minutes to midnight, though obviously we would encourage people not to leave it as late as that.”

For the less technologically minded, some managers have set up Isa hotlines to field late telephone applications. Invesco Perpetual and Fidelity will have lines open until midnight. When using the telephone or internet, you will need to use a debit card, rather than a credit card, and have sufficient cleared funds in your account to cover the purchase. You will also need your national insurance number.

If you want to mix and match your investments from a range of fund managers, you could apply online through one of the fund supermarkets, such as FundsNetwork or Interactive Investor, and through intermediaries such as discount brokers and independent financial advisers (IFAs), who also offer access to these supermarkets.

But before placing your Isa bets, you may want to study the form. Anyone with internet access can check the long-term performance of a fund or an individual manager by visiting timesonline.co.uk/funds. Some discount brokers and IFAs, such as Bestinvest and Hargreaves Lansdown, also carry fund research on their websites.

Charges are another important factor when deciding where to invest. To compare charges on different funds, look for the total expense ratio (TER), which includes management charges and additional costs, such as custody and audit fees. Details of most fund groups' TERs are available on the website of the Investment Management Association, while those of investment trusts can be found via the Association of Investment Companies.

If you are still uncertain what to do, it is always a good idea to seek independent financial advice, though this will be dificult to obtain in the few hours still available. Tim Cockerill, of Rowan & Co, the IFA, says: “It is always worth obtaining some advice before you make an Isa purchase. What looks like a good investment initially may not turn out to be as good as it seems.”

Those who wish to make use of their tax break but are unsure when or where to invest could put the money in a self-select Isa and simply hold it in cash until they feel ready to enter the market.

Some managers offer to stagger your investment into funds over several months and there is also the option of drip-feeding money in by regular monthly investment, though it may be too late to set this up before the deadline. Fidelity has a special option that enables investors to park their cash in a holding account - so that it is invested before the deadline - and then take their time to decide which funds to put their money in.

Many people want to avoid the stock market altogether and choose a cash Isa instead. This year they can put up to £3,000 in a cash Isa, either as a mini-Isa or as part of a maxi-Isa. As with equity Isas, you need to act fast and do your homework. You can compare the best cash Isa rates at timesonline.co.uk/savings.

However, after using the internet to do your research, you still need to apply directly to the Isa manager of your choice. Some, such as Halifax, can handle phone or internet applications but others cannot, so check first to make sure that you can beat the deadline. Even with Halifax, which is more flexible than most, you need to take care. It is now too late to apply over the internet and phone customers have until 1pm today to apply.

CASE STUDY: Staggered investment pays off

Chris Samuel, of Woking, Surrey, is an investor who has heeded the advice of financial experts and made use of his annual Isa allowance of £7,000 well before today's deadline.

The 33-year-old IT consultant, left, says: “It makes sense to invest the money bit by bit, rather than in a single lump sum. Investing over time means that you average out the cost of your fund purchases and it helps to avoid the problem of investing all your money when markets are fragile. I invested my money in two separate tranches last year.”

A third of Mr Samuel's money has gone into the JPMorgan Natural Resources fund and another third is invested in Fidelity's Emerging Europe, Middle East & Africa fund. The remainder has been divided four ways, with part of the money going into two Invesco Perpetual funds - Latin America and Hong Kong & China - and part into Fidelity's South-East Asia fund and the Gartmore China Opportunities fund.

Mr Samuel says: “I made a conscious decision to avoid the more developed markets of the world, such as the US and UK. Instead, I went for emerging economies and my decision seems to have paid off so far. Even after the recent huge sell-off in markets I am in profit over the year.”

The pros and cons

Investing in an Isa means that you can build up a large nest egg over the years, with no capital gains tax (CGT) to pay.

Investors in cash Isas and bond funds enjoy tax-free interest.

If you are a higher-rate taxpayer, you benefit from reduced tax on equity dividends.

One often overlooked attraction of Isas is that you do not have to include details of your Isa investments on your tax return.

Isas are very good for some but are not for everyone. Those in their sixties and seventies may not be investing for large capital gains so would not benefit from the CGT breaks.

Basic-rate taxpayers can no longer enjoy reduced tax on their dividend income, so they could be paying the higher charges without much extra benefit.