Falling deposit rates are forcing savers to look around for alternative options and a growing number are considering managed funds - a product similar to KiwiSaver which doesn't lock people's money in.

More than 40 per cent of 195 term deposit investors surveyed by the Financial Markets Authority said they were likely to invest less in them because of falling interest rates.

And a quarter of those people were considering managed funds.

Gillian Boyes, investor capability manager at the FMA, said it was natural for people to start looking for alternatives to term deposits when interest rates fall.

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But often they didn't know where to look for other investment options or how to know if it was a good one.

Boyes said a good place to start with managed funds - which pool people's money together and invest it into a range of assets like shares and bonds - was the government's smart investor tool.

"If it is not there, it is not a managed fund."

Another good way was to look at your KiwiSaver provider's website and see if they offer a non-KiwiSaver version.

"Essentially managed funds are KiwiSaver without the KiwiSaver rules," Boyes explains.

Investors can then search for that fund on the smart investor tool to see how its fees and returns compare to other similar funds.

Boyes said another type of managed scheme was exchange traded funds which are listed on a share market like individual shares and can be traded daily.

ETFs have low fees and typically track an index like the NZX/S&P50 owning a small portion of each of the 50 largest companies relative to their size in the index.

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Investment in a managed fund can start from $500 but online platforms like Sharesies and Investnow allow people to invest much small amounts starting from just a few dollars.

Boyes said Kiwis' level of knowledge of managed funds was low but the rise of investment in ETFs internationally gave her hope that investors here would also become more aware of them.

"With more people thinking about investing for the future, we want to ensure investors have access to good quality, independent information on how different investments work and what investors should consider," said Boyes.

The FMA has released a guide called Funds for Everyone to help people understand the options.