Christian Hawkesby, head of fixed income at Harbour Asset Management, said banks' approach to term deposits had changed and some clients had not yet fully understood that.

“I don’t think that people really understand that term deposits are not a liquid investment.  They are effectively lending their money to the bank for a fixed period, and the bank is not obliged to pay them back early," he said.

"For a long time, banks let their customers break term deposits if they wanted their money back early, as a way of maintaining a good relationship. However, new regulations post-GFC mean that for banks to count term deposits as a stable source of funding for regulatory purposes, then they are not allow to let term deposits be broken early – unless there are exceptional circumstances.  The whole idea is that banks need stable sources of funding to be resilient to shocks like a future GFC."

He said that meant investors needed to think more carefully about liquidity and diversification.

"If they place some value on having access to their investments at short notice, they might allocate a part of their portfolio in a call account at a bank or in liquid fixed-interest securities, or in a fixed interest or income fund that holds a portion of liquid securities and has daily liquidity."

But Jeremy Sullivan, of advice firm Hamilton Hindin Greene, said clients also needed to understand that "cash in the bank" was not always the safest strategy.

If another crisis were to hit and banks wobbled, funds could be at risk because of the Open Bank Resolution policy.

This allows deposits of unsecured creditors, such as those with cash and term deposits in the bank, to have a portion of their funds used to prop up the bank. Those with term deposits would have to wait 32 days to get their money, to avoid a run on the bank.

"People think the bank is safe, but if we had another crisis and everyone sold shares and bonds to put their money in the bank, that could be the worst place to be."

He said the bond market could offer better returns and mitigate some of that risk.

"If you are feeling particularly cautious, New Zealand Government Bonds offer the safest level of protection and there are number of good-quality investment grade corporate bonds which offer attractive rates and most importantly, liquidity."