Top performing Cash ISAs revealed

Cash ISAs are many savers' first port of call when it comes to creating a nest egg, but in a turbulent year just who has reigned supreme, offering the best rate of return to savers?

This year's cash ISA survey from Moneyfacts.co.uk shows the projected values over the 2008/09 tax year. Assuming that the full investment of £3,600 was made on 6 April 2008, no withdrawals were made and all interest was compounded during the tax year, the survey has yielded some very interesting results.

Michelle Slade, analyst at Moneyfacts.co.uk commented: "Alliance and Leicester took the top spot with its Premier ISA (£3,927.37), but in order to qualify for the account you had to be new or existing Premier current account customer and invest at least £5,000 in another A&L investment product.

"Unsurprisingly it was fixed rate cash ISAs that yielded some of the top returns. Savers who locked the rate on their money last year achieved an interest rate of 6.25% from Bradford & Bingley and would have weathered the storm of interest rate cuts that followed as the crunch began to bite.

"National Counties BS (£3,785.06) took the top spot for variable rate ISAs, closely followed by Loughborough BS (£3,784.83). Considering how far base rate fell in the year, these are impressive results.

"The ISA Saver (£3,678.05) from Halifax and Cash ISA (£3,683.39) from Alliance & Leicester were the worst performing ISAs of last year, showing that savers really should shop around and not just approach their current account provider.

"Despite a string of rate cuts in the last six months, cash ISAs still provide the best value for money, with the average rate today standing at 1.94% compared to just 0.65% on a no notice account. The forthcoming increase in ISA allowance to £5,100 will be a much welcomed boost for disillusioned savers.

"Many over 50s rely on the interest from their savings as their main source of income. While the Treasury is supporting them, they still have to wait until 6 October to benefit from the increase in allowance.

"Manchester BS currently tops the Moneyfacts.co.uk best buys, paying 3.56%. The only benefit to savers is from non payment of tax on any interest earned. Over 50's would receive an extra £5.34 this tax year should they top up with the additional £1,500 in October, when compared to investing the same amount at the same rate in a standard savings account.

"Anyone not in the top paying account will receive much less benefit, with those in an average paying account getting just £2.91 in additional interest."