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Jeffrey Hutton is a Morningstar contributor.

Adam Beu is sifting through research. Next week his consultancy, Canstar Cannex, will decide on this year's winner of the country's best value term deposit.

As recently as April, Canstar, which compares credit cards, term deposits and insurance products for consumers, found Australians have shied away from bonds and equities. They have socked away about $230 billion in term deposits, which can tie up cash for months.

And while Beu hasn't finished crunching the numbers, his best guess is that Australians are saving even more.

"There's a lot of uncertainty out there," Beu says.

"Australians are more aware of the savings products out there and they're not spending."

Burned by the global financial crisis, underwhelmed by rates on overseas government debt, and wowed by the explosion of new savings products offered by banks, Australians are hoarding cash.

The trouble is, they risk missing out on gains from asset classes that usually perform better, says NAB Private Wealth chief investment officer Philip Kimball.

"Cash is never king, but it has some princely qualities," Kimball says.

Term deposits offer transparency and security, but cash is usually eclipsed by equities or fixed income. Given lacklustre sharemarket performance in recent years, equities, for example, may have room to grow, Kimball suggests.

"Cash rarely outperforms," Kimball says.

What is at play is a combination of fear and greed on behalf of both banks and retail investors. From the height of sharemarkets to their trough during the GFC, about half of the value of Australian equities evaporated.

Australians had just under $180 billion in term deposits in February 2009, according to Canstar Cannex. Amounts stashed away in personal transaction accounts have hovered in the range of $100 billion to $120 billion from the beginning of 2009 to the end of last year, the consultancy says.

Banks are also keen to shore up their funding through domestic deposits and rely less on overseas wholesale money markets.

NAB subsidiary UBank is offering a 12-month term of 6.01 per cent at a time when the cash rate is 4.75 per cent. Traditionally, rates on term deposits hover in a band of 25 basis points above or below the cash rate.

Flexibility is also improving. ING Direct is allowing customers to choose their own maturity dates, offering 6.3 per cent interest on deposits of at least $10,000 over 270 days. Some institutions are adding extra facilities, such as allowing customers to pay bills and make other transfers from the term deposit rather than from a transaction account.

"Cash used to be something you locked away," Beu says.

"Now it's more of an active asset."

The flight to cash was dramatic during the onslaught of the GFC, according to Multiport, which administers transactions on behalf of self-managed super funds (SMSFs).