Savers unwilling to tie up their money are failing to take advantage of the most generous tax-free interest rate currently available on the market.

Contrary to expectations, investors worried about the effects of inflation have not inundated National Savings Investments (NSI) with deposits after it reissued its Index-Linked Savings Certificates in May – in spite of warnings from advisers that they would sell out in weeks.

In 2010, these certificates proved so popular that the government’s savings arm had to withdraw them, for fear that it would exceed its mandate of attracting no more than £2bn.

After this target was raised by £2bn for 2011/12, a new set of 5-year savings certificates were released, promising to pay 0.5 percentage points above the retail price index (RPI) rate of inflation, which is currently 5.2 per cent.

Many financial advisers predicted that the certificates would be sold out in weeks but, two months on, they are still available to savers.

In fact, results published this week show that NSI’s share of the savings market has decreased since the end of May 2010: from 7.99 per cent to 7.83 per cent.

NSI points out that it did not offer the new certificates via the Post Office this time – instead, only selling them online or by phone, following the high demand last year.

However, others say that this lower level of demand indicates how unwilling savers are to tie up their money right now – even with the prospect of beating inflation.

“It’s so hard to know what will happen in five years’ time, and people do seem to think that the outlook for inflation has improved and that it might peak this year,” explained Adrian Lowcock of advice firm Bestinvest. “Tying up money for five years in this environment is a difficult commitment to make.”

But while the NSI Index-Linked Certificates have a five-year term, savers who take their money out after one year will still benefit from a degree of inflation-proofing.

Cash withdrawn before the first-year anniversary will earn no interest at all but, on the first anniversary, sums will be repaid with interest equivalent to RPI plus 0.25 percentage points. After the second anniversary, it will be paid with interest of RPI plus 0.4 percentage points.

RPI is calculated using the previous month’s figure from the Office for National Statistics.