Frequently Asked Questions on Binance Margin Trading’s New Dynamic Interest Rate System
2019-07-05 05:38
Lastupdated :18 October 2024
Effective from 2023-03-01 06:00 (UTC), Binance Margin’s new dynamic interest rate system ensures interest rates always reflect current market conditions.
1. How will I be impacted?
Margin loan interest rates will change every hour based on current market conditions. Binance Margin users will continue to be charged simple interest for their borrowings hourly. The interest accrues at the start of each hour (e.g., 13:00, 14:00) and is added to their total margin debt every time it accrues.
2. Where can I find the latest interest rates?
You can view the latest token borrow rates on the Binance Margin Data page and API. Additionally, you can also find the next hour's estimated interest rate on the Margin Trading webpage, with corresponding API endpoints as well.
3. Where can I view historical margin interest rates?
You can view up to 30 days of historical margin interest rates on the Binance Margin Interest History page or access up to 6 months of records via API. You may also use the [Export] function to download data from the past year. If multiple interest rate records exist within a day, only the highest interest rate data will be shown.
4. How is interest calculated?
The system automatically accrues one hour's interest when you borrow funds. Subsequently, new hour's interest accrues at the start of each hour.For example, assuming the hourly interest is 0.001%, if User A borrows 1,000 USDT at 13:55, and it’s now 14:30, the interest accrued so far is:
1,000 * 0.001% * 2 hours = 0.02 USDT
User A will be charged two-hours of interest because the first interest accrues at 13:55, and the second accrues at 14:00.
5. What if I repay my margin loan early?
While the interest rate calculations remain the same under the new dynamic interest rate system, it’s important to understand how interest is calculated. You can repay your margin borrowings at any time. However, if funds are borrowed for less than an hour, you’ll still be charged for a full hour’s interest.
The calculation formula is:
I (Interest) = P (Borrowed Amount) * R (Hourly Interest Rate) * T (Hours)
Note: Interest is rounded up to 8 decimal places.
For example, if the hourly interest is 0.001%, and User A borrows 1,000 USDT at 13:20 and repays at 14:15, the interest rate calculation is:
1,000 * 0.001% * 2 hours = 0.02 USDT
User A is charged for two hours of interest, with one hour covering the period from 13:20 to 13:59, and another from 14:00 to 14:15.
6. How will this impact my margin levels?
Since interest rates may fluctuate with market conditions, we recommend closely monitoring both the applicable interest rates and your margin level to avoid potential liquidation from significant interest rate changes and/or accumulated interest accrued over time.
For more information regarding Margin Trading, please refer here:
