There are at least three reasons for the decline in the interest rate of bank time deposits: first, China's economy is facing the risk of "liquidity trap", and the overall decline in interest rates has obviously reduced the opportunity cost of residents holding deposits with different maturities. The "liquidity trap" is not only manifested in the diminishing marginal effect of the continuous decline of the interest rate level on stimulating the investment willingness of the enterprise sector, but also in the fact that with the overall sharp downward shift of the interest rate center level, the residents' sensitivity to the deposit term premium has decreased significantly, and the slight term premium has little effect on the residents' deposit decision. With the continuous easing of the monetary policy of the Bank of China, the real interest rate after deducting inflation has been negative, and with the overall downward trend of the market interest rate, more and more bank deposit term premiums will disappear or become negative. Second, in the downward cycle of interest rates, banks reduce the term premium to encourage residents to shorten the term of deposits and reduce their long-term debt costs. Theoretically speaking, in the upward cycle of interest rate, banks will give higher deposit term premium and lock in long-term deposits with lower overall interest rate in advance. On the contrary, in the downward cycle of interest rates, in order to prevent residents from locking in long-term income in advance, banks will reduce the deposit term premium, reduce the cost of their own liabilities and improve the overall level of deposit-loan spreads by "borrowing short and letting long". At present, China's economy is still in the downward cycle of interest rates, and it is normal for banks to reduce the maturity premium at the debt end. Third, in order to maintain a stable spread, banks are reluctant to raise long-term deposit interest rates. Taking the spread of ICBC as the average spread of bank deposit and loan industry, this paper compares the interest rate of individual housing loan with the interest rate of five-year deposit. At the end of the first quarter of this year, the sum of bank deposit and loan spreads and 5-year deposit interest rate was significantly higher than the weighted interest rate of personal mortgage loans, and the weighted interest rate of personal mortgage loans further declined at the end of the second quarter of this year. Therefore, in order to maintain the profitability of long-term deposit and loan business, commercial banks are unwilling to raise the interest rate of five-year long-term deposits. In the current downward cycle of the overall interest rate level in the market, the phenomenon that the long-term and short-term interest rates of residents' time deposits are upside down will continue. For ordinary people and investors, it is suggested to expand diversified financial channels.