Add CustomSetting manually in your settings.settings file
System.Configuration.SettingsProperty property = new System.Configuration.SettingsProperty("CustomSetting");
Properties.Settings.Default["CustomSetting"] = txt_Cipher.Text;
Properties.Settings.Default.Save();
txt_Cipher.Text = string.Empty;
use this code to update the settings
its working fine for me and an xml file is created for this settings as
<?xml version="1.0" encoding="utf-8"?>
<configuration>
<userSettings>
<WindowsFormsApplication1.Properties.Settings>
<setting name="CustomSetting" serializeAs="String">
<value>1</value>
</setting>
</WindowsFormsApplication1.Properties.Settings>
</userSettings>
</configuration>
Please add customsSettings as shown in the picture