How the calculation works
Funding is exchanged between longs and shorts once per interval. The per-interval rate is small, but it repeats hundreds or thousands of times a year. The calculator counts how many intervals fit in a year, applies your rate and side, and scales the result to APR and APY.
Simple APR just multiplies the per-interval rate by the number of intervals in a year. APY assumes each payment is reinvested, so it compounds — which is why APY is always slightly higher than APR, and the gap widens as the rate grows. Both assume the rate and your side hold steady for the entire year; in reality funding is reset every interval and routinely flips sign, so the realized figure is almost always lower than the headline APR.
Key concepts
Simple APR vs compounded APY
APR multiplies the per-interval rate by the intervals in a year and ignores reinvestment. APY assumes each funding payment is added to the position and earns funding itself, so it compounds. APY is therefore always equal to or higher than APR, and at high rates the difference becomes large. Use APR to compare opportunities and APY only if you genuinely reinvest every payment.
Funding intervals differ across exchanges
Most venues settle funding every 8 hours (three times a day), but many use 4-hour, 2-hour or even 1-hour schedules, and the interval can vary per symbol. The same headline rate annualizes very differently: 0.01% per 8h is about 11% APR, while the same 0.01% paid hourly is roughly 88% APR. Always check the actual interval before comparing two rates.
Which side earns
When the funding rate is positive, longs pay shorts — so a short position receives funding and a long pays it. When the rate is negative, the flow reverses: shorts pay longs. Funding always moves from the crowded side to the other, nudging the perpetual price back toward spot. Pick your side to match where the payment lands.
Why realized yield differs from headline APR
Annualized APR is a snapshot frozen forever — it assumes the current rate and your side never change. In practice funding is reset every interval, often flips sign, and the position you hold to collect it carries its own risk and cost. Treat the APR figure as a ceiling for ranking opportunities, not a return you will actually book.
This is an estimate, not a guarantee
Funding rates are reset every interval, can flip sign without warning, and are never guaranteed — a position that earns today can pay tomorrow. Annualizing a single snapshot assumes a stability that does not exist. The only way to harvest funding with limited directional risk is a delta-neutral pair: a long on one venue against an equal short on another, so price moves cancel and you keep the funding differential.
Frequently asked questions
How do you calculate funding rate APR?
Take the funding rate for one interval and multiply it by the number of intervals in a year. The number of intervals is 8,760 divided by the interval in hours — so 1,095 for 8-hour funding, 2,190 for 4-hour, 4,380 for 2-hour and 8,760 for 1-hour. For example, 0.01% every 8 hours gives 0.01% × 1,095 ≈ 10.95% APR. This is simple APR; compounding each payment gives the slightly higher APY.
How do I convert a funding rate to APY?
APY compounds the per-interval rate instead of just adding it up. The formula is (1 + rate ÷ 100) raised to the power of the intervals per year, minus 1. For 0.01% every 8 hours that is (1.0001)^1095 − 1 ≈ 11.6% APY, versus 10.95% simple APR. APY only reflects reality if you actually reinvest every funding payment back into the position; otherwise compare on APR.
What is a good funding rate APR?
There is no fixed threshold, but as a rough guide a funding APR in the low single digits is unremarkable, the 10–20% range is worth attention, and anything above 30% signals strong directional pressure that rarely lasts. The higher the APR, the less likely the rate persists, so weigh the headline number against how long the imbalance has held and the cost of holding the position.
How often is funding paid?
Most exchanges settle funding every 8 hours — typically at 00:00, 08:00 and 16:00 UTC. Many venues offer shorter schedules of 4, 2 or 1 hour, especially on volatile or high-demand contracts, and the interval can differ from symbol to symbol on the same exchange. Funding is only charged or paid if you hold the position at the settlement timestamp; closing beforehand pays nothing for that interval.
Does a long or short position earn the funding?
It depends on the sign of the rate. When funding is positive, longs pay and shorts receive; when funding is negative, shorts pay and longs receive. The payment always flows away from the more crowded side. To earn rather than pay, take the side opposite to the dominant positioning — but remember that side carries full directional exposure unless you hedge it.
Why is my realized funding lower than the calculated APR?
Because annualized APR assumes the current rate and your side stay fixed for a full year, which almost never happens. Funding is reset every interval and routinely flips sign, so the rate you annualized may not survive the next settlement. The APR figure is best used to rank and compare opportunities at a moment in time, not as a return you should expect to actually collect.