Binance funding rate explained: formula, payment direction and funding time
Quick answer
What this page helps you decide
For Binance funding rate, confirm the entry path and prerequisites first, then review fees, limits, risk checks and the follow-up verification step.
- Understand leverage and margin mode
- Define stop and position limits first
- Review liquidation price after entry
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What is the Binance funding rate?
Binance funding rate is the rate used to calculate periodic payments between long and short positions in perpetual futures. It helps keep a perpetual contract close to its underlying market price without requiring the contract to expire.
If your position is still open at the funding timestamp, the rate sign and your position side determine whether you are expected to pay or receive funding. Binance facilitates the transfer, but the funding payment is normally exchanged between market participants rather than charged as a standard trading commission.
Why it matters
Funding can change the real result of a futures trade. A position that looks profitable by price movement alone can have a different net result after funding, trading fees and slippage.
| Check | Why it matters |
|---|---|
| Current funding rate | Helps estimate possible payment |
| Next funding time | Shows whether your holding period crosses settlement |
| Position side | Long and short sides can have different payment direction |
| Position notional | Larger market exposure means a larger funding amount at the same rate |
| Funding history | Confirms what was actually paid or received |
Who pays the Binance funding fee?
The usual direction is:
| Funding rate | Long position | Short position |
|---|---|---|
| Positive | Usually pays | Usually receives |
| Negative | Usually receives | Usually pays |
This table describes the standard perpetual-futures mechanism. The live rate, contract rules and settlement record remain the final references.
Binance funding fee formula
Use this as a planning estimate:
estimated funding payment = position notional x funding rate
For example, suppose a position has a notional value of 20,000 USDT and the displayed funding rate is 0.01%:
20,000 x 0.0001 = 2 USDT
The estimated payment is 2 USDT. Whether that amount is paid or received depends on the rate sign and position side.
Position notional is the value of the exposure, not only the margin deposited. A 20,000 USDT position supported by 2,000 USDT of margin still uses the position notional in the estimate. Do not multiply the result by leverage a second time.
When is funding charged?
Funding applies only when the position remains open at the funding timestamp. Closing before that timestamp normally means that position does not participate in that settlement, although trading fees and price movement still apply.
Check the countdown for the specific contract. Funding intervals and adjusted schedules can vary, so a remembered interval is less reliable than the live next-funding time.
Funding rate vs trading fee
| Cost | Trigger | Main variables |
|---|---|---|
| Funding payment | Position open at funding time | Rate, position side and notional |
| Trading fee | Order execution | Filled value, maker/taker role and fee tier |
| Slippage | Execution across available prices | Order type, size and order-book depth |
A trade can incur a trading fee without funding if it does not cross a funding timestamp. A position held through funding can have both.
Common mistakes
- Funding rate is not the same as a trading fee.
- Funding matters only if the position is open at the funding timestamp.
- The displayed rate can change before the final settlement details are recorded.
- High leverage can make a small funding payment feel larger relative to margin.
- Closing only to avoid funding can create new trading fees, slippage and market-timing risk.
A four-point check before settlement
- Record the current rate and next funding time for the exact contract.
- Confirm whether the position is long or short and note its current notional.
- Estimate the payment, then compare it with trading fees and expected holding time.
- After settlement, use funding history to verify the actual debit or credit instead of relying only on the PnL panel.
What to read next
- Binance Futures funding time
- Binance Futures fees vs funding rate
- What is Binance mark price?
- Market order vs limit order
- Binance maker and taker
Inside Binance, treat the live funding countdown, contract details and funding history as the final reference before holding a perpetual futures position through funding time. Facts checked on 2026-08-05.
FAQ
FAQ
How is the Binance funding fee calculated?
A planning estimate is position notional multiplied by the funding rate. Use the live contract page and funding history for the final amount because the displayed estimate can change before settlement.
Who pays when the Binance funding rate is positive?
For the standard perpetual-futures mechanism, longs generally pay shorts when the rate is positive and shorts generally pay longs when it is negative. Confirm the live contract details before settlement.
Does leverage get multiplied into the funding formula?
No. Funding is calculated from position notional, not by multiplying the fee by leverage again. Leverage can still make the fee feel larger relative to the margin supporting the position.
How often does Binance charge funding?
Funding follows the interval and countdown shown for the specific perpetual contract. Do not assume every contract always uses the same interval; check the next funding time on the live page.