The findings have been revealed in the latest ASB Investor Confidence Survey, which found 21% of investors believed they offered the best returns, up 1% on the previous quarter.

"Term deposits are back to their highest level of popularity, last achieved in the 2008 third quarter," said ASB head of private banking and wealth management Jonathan Beale.

While Beale said term deposits remained popular, he said the data indicated a dip in sentiment in December.

"Investors are likely to have been influenced by the December Reserve Bank announcement cautioning a slowdown on interest rate rises, which they again repeated in January," he said.

The survey found overall investor confidence has begun to rise, with the three months to December 31 seeing the number of investors expecting to see their returns improve climb 4% to 19%.

Beale said that while the economy went through a flat patch in the middle of last year, "confidence looks to have turned a corner again as the looming spectre of a double-dip recession fades."

Rental property was the next most popular investment class, with 14% believing it offered the best investment returns.

For the first time, KiwiSaver leapfrogged both managed funds and shares to take third place with 11% rating the scheme as the investment option with the best returns.

Managed funds was the fourth most popular investment (9%), followed by shares (6%).