Annualized Funding Rate

Inputs

Choose what to solve for, then fill in the other two. Crypto perpetuals typically settle funding every 8 hours — that is 1095 payments per year on a 365-day calendar. Negative rates model the reverse case (shorts paying longs).

Results

Where the annualized rate falls

The bar spans from −100 % to +150 % annualized. The dark band around zero is the neutral zone of roughly ±5 %. The amber marker shows your annualized rate.

Annualized rate vs funding rate per period

On this linear plot the annualized rate is proportional to the per-period funding rate, with slope equal to Periods × 100. Reference lines show the 1 h, 4 h, 8 h and 1 d intervals; the solid teal line is 8 h. Your point is the amber dot.

What is being calculated

Common funding rates and their annualized values

Computed by the same engine with 365-day years. Illustrative values, not exchange quotes.

Typical funding intervals by exchange

The 8-hour interval dominates. That gives a per-period-to-annualized multiplier of 1095, so a 0.01 % rate becomes 10.95 % annualized — the most useful single number to memorise.

Key relations and unit conversions

Formula

• Annualized (%): the funding rate expressed as a percent per year, assuming the same rate applies every funding interval for a full year
• Rate: the funding rate per interval, entered as a decimal, percent, basis points or ppm — the calculator converts automatically
• Periods: the number of funding settlements per year, e.g. 1095 for 8-hour funding on a 365-day calendar

Example — the most common crypto case. A Binance BTC perpetual quotes funding of 0.01 % per 8 hours. That is Rate = 0.0001 decimal and Periods = 1095. Then Annualized = 0.0001 × 1095 × 100 = 10.95 %. A trader holding $100 000 of notional long pays roughly $10 per funding interval, about $30 per day, and $10 950 over a full year if the rate never changes.

Crypto perpetual futures have no expiry, so they use a periodic funding payment between longs and shorts to keep the contract price anchored to the spot index. When the perp trades above spot, funding is positive and longs pay shorts, discouraging the long and pulling the price back down. When it trades below spot, funding is negative and shorts pay longs. The exchange sets a base rate — commonly 0.01 % per 8 hours on major pairs — and adds a small premium reflecting how far the perp has drifted from the index.

The formula is a simple annualization: it multiplies the per-period rate by the number of periods in a year. A compounding version gives (1 + Rate)^Periods − 1. For the funding rates typical of crypto perps the difference is small: at 0.01 % per 8 hours, simple gives 10.95 % and compounding gives 11.57 %. Exchanges and data providers quote the simple version. The rule of thumb to remember is that on 8-hour funding, each 0.01 % per period equals roughly 10.95 % annualized.

In practice the funding rate is not constant. It is recomputed every interval from the difference between the perp mark price and the underlying index. The annualized figure is a snapshot: it tells you the cost of carry if the current rate persisted. For persistent carry trades traders look at the trailing 7-day or 30-day average annualized rate. For a quick sense of whether funding is elevated, 10–15 % annualized is the neutral band on major pairs; 50 % or above is high; 100 % or more is extreme.

Advanced mode adds an optional notional size so the tool reports the actual dollar cost per funding interval, per day, per week, per month and per year; the compounded annualized rate for comparison; and the daily and annualized basis point equivalents.

References

• Wikipedia, Perpetual futures: funding mechanism and the base rate
• Wikipedia, Basis point: 1 bps = 0.01 % = 0.0001 decimal
• Binance, Introduction to Funding Rates: 8-hour interval and the 0.01 % base rate
• Wikipedia, Annual percentage rate: simple vs effective annualization
• Investopedia, Cost of Carry: funding as a cost-of-carry between spot and derivative

How to Use This Tool

1. Choose what to solve for: Annualized %, Rate per period, or Periods per year.
2. Pick a preset, or type the two known values. Use the %, bps, decimal or ppm unit for the rate, and click a period pill (8 h, 4 h, 1 h, 1 d) to fill the periods field instantly.
3. In Advanced, add a position notional in dollars to see the funding cost per interval, per day and per year.
4. Click Calculate.
5. Read the highlighted answer, then check the gauge and the annualized-vs-rate chart.

What This Tool Offers

• Solves Annualized = Rate × Periods × 100 for any of the three variables
• Rate accepted in %, basis points, decimal or ppm — converted automatically
• Preset period pills for 1 h, 2 h, 4 h, 8 h, 12 h and 1 d
• Position notional input for per-interval, per-day and per-year funding cost
• Simple and compounded annualized rates side by side
• Classification against common crypto ranges (low, moderate, elevated, high, very high, extreme)
• Gauge showing where the annualized rate falls, and a rate-vs-annualized chart with reference lines
• Ready-made presets and a mobile-friendly layout