Autumn Statement: New 2.2% savings bond on offer next year

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A new savings bond offering a "market-leading" rate of 2.2% will go on sale next year, the chancellor, Philip Hammond, has announced.

Anyone over 16 will be able to invest up to £3,000 in the three-year bond.

For the moment the rate of 2.2% is only "indicative", and will be fixed when the bond is launched some time after April 2017.

The chancellor said two million people should benefit. However, critics said the offer was "underwhelming".

The bonds, from National Savings and Investments (NS&I), will be known as Investment Guaranteed Growth Bonds.

Anyone investing the full amount can expect a total return of £202 at the end of three years, subject to tax.

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Sue Hannums, a director of Savings Champion, said that sort of return was "a little bit underwhelming".

"A £3,000 maximum will not set the world alight, but it is a gesture," she told the BBC.

However, the indicative rate would be better than any others currently on the market.

The best return for a three-year bond is 1.62% at the moment.

But by the time the bond launches next year, it may well be that interest rates - and returns for savers - are higher than they are now.

When the government announced its so-called Pensioner Bonds in 2015, more than a million people bought them.

But then the interest rates were higher - 4% for a three year bond - and savers were allowed to invest up to £10,000 each.

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