Best fixed rate cash Isas

We list the best fixed rate cash Isas on the market, including one, two, three and five years

Isas (Individual Savings Accounts) allow people to save thousands of pounds tax-free every year. The maximum cash Isa amount for this tax year is £5,760. This means that savers who put away the maximum allowance, on a two-year fixed Isa with an average interest rate of 2.1pc, will earn £120.96.

On a normal savings account, all money is subject to a basic tax rate (20pc), meaning £5,760 would accrue £96.77 in interest if using the same interest rate of 2.1pc. For higher rate taxpayers (40pc), interest of £72.48 would be earned.

Fixed rate Isas mean that savers cannot access their money during the fixed term, if they do, they will face the penality of lost interest.

Interest rates on Isas and other savings accounts are influenced most by the UK Bank Rate but also by how keen banks and building socieities are to raise money from savers.

Mark Carney, the Bank of England Governor, has indicated that interest rates will remain low until 2016, so the rates on Isas are unliklely to rise significantly for some time.

This means that locking your money into a one, two or three year fixed rate Isa could be a good idea if the income meets your needs, and you're certain you won't need to touch the money during the fixed term.

For those unhappy with the interest rates offered on Isas, we look at some other, imaginative ways for savers to get income, with our 'Four ways to beat the savings drought' .

The best deals

One year fixed rate Isas *Virgin Money pays a rate of 1.91pc on its one year fixed rate cash Isa (Issue 57) on balances from £1. Transfers in from other Isas are accepted, and withdrawals are allowed subject to 60 days' loss of interest. If account holders save the maximum amount of £5,760, they would earn £110.02 in interest over the year. *The Post Office's one year fixed rate Isa stands at 1.90pc. Savers must deposit at least £500 into the account. No additional deposits or withdrawals are allowed during the fixed term. If account holders do need to access their money, they will need to transfer to another provider or close the account, subject to a breakage charge. If account holders save the maximum amount of £5,760, they would earn £109.44 in interest over the year. Two year fixed rate Isas *Britannia Building Society - part of the Co-operative Bank - is offering a rate of 2.05pc on its two year fix . Savers can transfer an Isa held with another provider. Early withdrawals or account closure will be subject to a deduction of 180 days interest. Savers would earn £118.08 a year in interest on the maximum amount of £5,760. *Halifax is offering a rate of 2pc on its two year fix . No withdrawals are allowed. Early closure or transfer out is permitted but closing your account early will result in the loss of 180 days’ tax free interest. Savers would earn £115.20 a year in interest on the maximum amount of £5,760. Three year fixed rate Isas *Virgin Money is offering a rate of 2.40pc on its Isa fixed until November 24 2016. Withdrawals are allowed subject to 120 days' loss of interest. Savers would earn £138.24 a year in interest on the maximum Isa allowance of £5,760. Five year fixed rate Isas *Skipton Building Society is offering a rate of 3pc on its five year fixed rate Isa . Savers must deposit a minimum amount of £500 and transfers in from other Isas are allowed. Withdrawals will be subject to 240 days loss' of interest. Savers would earn £172.80 a year in interest on the maximum Isa allowance of £5,760. This guide lists the best deals available and will be frequently updated with the latest information, so bookmark www.telegraph.co.uk/isas