The government has revealed it is to launch a new savings bond, paying 2.2% interest. The Investment Guaranteed Growth Bond will launch via National Savings & Investments in April 2017.
Interest accrued from the bond will be paid gross – and it is still not clear whether returns will be subject to tax, although current sentiment suggests that they will be.
Despite offering a market-leading rate in comparison to alternatives in its comparable class, some industry analysts are pessimistic on the bond due to the fact that that the returns generated are low in relative terms.
With the maximum balance set at £3,000, savers will receive £66 of interest per year or £198 over the course of three years.