ISA DEADLINE is the 5th of April - Top 5 Highest Paying ISA's

Banks and building societies have launched a rash of new savings accounts, aimed at those looking to make the most of their tax-free cash savings this year.

Savers have until April 5 to deposit £5,340 into a cash Isa (Individual Savings Accounts). Unlike conventional savings accounts, interest is paid gross, without 20pc tax being deducted. But there are a variety of different cash Isas on the market; below we look at those paying the highest interest:

1 Instant Access

If you want to have access to your savings then Cheshire Building Society's Direct Cash Isa offers the best deal. This is currently paying 3.5pc, although this does include a bonus of 2.5pc payable for just the first 12 months.

Sylvia Waycot of Moneyfacts.co.uk , said: "Most top-paying Isas now have bonus rates. These can boost returns in the short term, but savers should make sure that they make a note of when this bonus expires, and switch accounts then, as in most cases the interest they then receive will be far from competitive." However, you cannot transfer existing Isas into this account.

[Related link: The top ISA deals]

2 Best for transfer deals

Many of the best-paying Isas are only available to those with new money to invest, and won't accept transfers from existing Isa accounts.

However, given the paltry rates paid on the majority of Isa accounts that have been running for 12 months or more, it can make sense to find the best transfer deals, even if you don't have any surplus cash to open an Isa this year. Santander offers one of the best deals. Its Direct Isa (Issue 9) pays 3.3pc, accepts transfers in, and offers instant access.

The only downside is that this rate includes a 2.8pc bonus, again payable for 12 months, so make sure you transfer your money again at the end of this period.

3 Best for long- term fixes

If you can afford to lock your money away for longer, you should get a better rate of return on it. Halifax is currently leading the way when it comes to fixed-term Isas. Its five-year fixed rate Isa is paying 4.5pc, while it also offers the best three-year fix, paying 4.25pc.

However, those taking up this option must remember that they will pay substantial penalties should they need to access their money before the end of the term. On the five-year deal they will lose a year's interest, while on the three-year bond the penalty will be equivalent to 270 days' interest.

[Related link: Compare cash ISA deals]

4 Best for short-term fix

In the Isa market, one-year bonds have proved popular. These lock your money away for the short-term, but give you the flexibility to either access this money, or move it into another Isa holding at the end of the 12-month period.

Currently the best one-year deal is from Saga, paying 3.6pc, but this account is only available to those aged 50 or older.

For younger savers, the next best deal is from Marks & Spencer Money, paying 3.25pc although this pays less interest than the Santander Direct Isa, which also offers instant access. 

5 Best Junior Isa

For the first time those aged under 18 can take out an Isa in their own name. However, not all children can benefit.

Those born between September 2002 and January 2 2011 won't be able to open one of these accounts because they would have already qualified for a Child Trust Fund. Children also can't save as much into an Isa as their parents, the maximum is £3,600.

And unlike an adult Isa there isn't the option of accessing this money, at least not until the child's 18th birthday.

But it is possible to transfer these accounts, if you find the deal you have taken no longer proves competitive. Nationwide Building Society offers the most competitive cash Isa deal paying 3.25pc. This includes a 1.15pc bonus, payable until January 31 2014.

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