The core trade-off of FPSL can be summed up in one sentence: you give up voting rights in exchange for passive interest, while other shareholder rights such as ownership and the ability to sell are not affected.
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Whether you should turn it on depends on what kind of stocks you hold and how much you care about voting. If you hold broad-based ETFs for the long term, or large-cap stocks where you do not care about shareholder meeting votes at all, FPSL is a low-friction source of extra income. If you hold individual stocks where you plan to take part in governance, or where the voting rights themselves have value, turning on FPSL means giving up those rights during the lending period.
What FPSL Actually Lends
FPSL is a feature in Binance stock trading. Its full name is Fully Paid Securities Lending. Once you turn it on, your fully settled US-listed stocks and ETFs in your account may be automatically lent out. The borrowers are institutions matched through Alpaca, usually for short selling, hedging, or settlement delivery.
You still own the lent stocks and can sell them at any time. The moment you sell, the lent stocks are automatically recalled, and interest stops accruing from the point of sale.
How Interest Is Calculated and When It Is Paid
Your income comes from the share of lending fees paid by the borrower that is allocated to you. Interest accrues daily and only applies to stocks that are actually being lent. If a stock is not borrowed, no interest is generated that day.
The formula is: interest = market value of lent stocks × annualized lending rate × your share ratio ÷ 365 × number of lending days. The annualized rate is determined by market supply and demand. Stocks with high short-selling demand usually have higher rates, which is why meme stocks or highly volatile individual stocks may generate more income than broad-market ETFs.
Interest is paid at the end of the following month in USDC into your funding account. If you join FPSL in the middle of a month, that month's interest is still calculated for the full month and paid at the end of the following month.
What You Lose After Turning On FPSL
This is the most important part to understand before making a decision.
Voting rights are temporarily lost. While your stocks are lent out, you cannot cast proxy votes on the lent stocks. If you hold a stock because you care about its shareholder resolutions or plan to take part in corporate governance, this loss is substantial.
Dividends are paid as cash substitutes. If the lent stocks pay dividends during the lending period, you will not receive the dividend in stock form. Instead, you receive an equivalent cash payment, known as cash-in-lieu. In most jurisdictions, the tax treatment of cash-in-lieu may differ from normal dividends, so you need to verify this yourself.
SIPC protection does not cover lent stocks. Binance's official FAQ clearly states that lent stocks are not protected by SIPC, the Securities Investor Protection Corporation. SIPC protects customer assets in the event of a broker bankruptcy. While stocks are lent out, the legal holding relationship changes, and this layer of protection temporarily does not apply. This does not mean your assets will definitely have problems, but it does mean the protection level during the lending period is different from ordinary holdings.
When FPSL Is Not Suitable
If you hold individual stocks that you plan to vote on for the long term, or assets that you do not fully understand and only hold because of dividends or voting rights, the income from FPSL may not be worth giving up those rights.
If you hold individual stocks with very poor liquidity, the chance of them being lent out is already low, so turning on FPSL may not generate any income. FPSL interest is only earned when stocks are actually lent out, and there is no guarantee they will be borrowed.
If you care about certainty in tax treatment, the tax rules for cash-in-lieu dividends may be more complicated than normal dividends, and you need to judge this yourself.
When FPSL Is Suitable
If you hold broad-based ETFs such as SPY or QQQ, voting rights are almost meaningless to you, and the probability of being lent out is relatively reasonable. Turning on FPSL is a clean source of extra income.
If you hold individual stocks that you plan to keep for the long term, do not plan to vote on, and do not rely on dividend cash flow, FPSL offers a "do nothing" option. Once turned on, the system automatically decides whether to lend based on market demand, and you do not need to take any active action.
How to Turn It On and Off
Find FPSL in the "Features" area of the Binance App and turn on the switch. Before enabling it, you need to complete a short questionnaire and confirm the risk disclosure. You must meet at least one of the following eligibility requirements: account balance of at least $2,500, annual income of at least $20,000, liquid assets or net assets of at least $20,000, or at least 1 year of stock investment experience.
Turning it off is just as simple: switch off the FPSL toggle. After turning it off, no new lending will occur that day, but interest that has already accrued will still be paid at the end of the following month.
One Detail That Is Easy to Overlook
FPSL stock lending is executed automatically by Alpaca without notifying you in advance. You do not know which of your stocks is lent out, when, by whom, or for how long. All you can see is the interest accrual record, which you can check under Stock Orders - FPSL Allocation.
This means that if an important shareholder meeting happens to take place while one of your stocks is lent out, you cannot predict it in advance and prevent the lending. You can only turn off FPSL when you realize you need to vote, but stocks that were already lent out will not be immediately recalled just because you turned off the switch. The recall happens when you sell or when the borrower returns the shares.
If you hold stocks whose votes you care about, do not keep FPSL on while waiting for a shareholder meeting. Turn it off before the record date for voting, and confirm that your holdings have returned to an unlent state.
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References
- Binance·What Is Stock Trading FPSL Program?, page published or updated: 2026-08-14; verified: 2026-09-25.
- Binance·什麼是FPSL（全額支付證券出借）?, page published or updated: 2026-06-10; verified: 2026-09-25.
- Binance·O que é o programa de empréstimo de valores mobiliários?, page published or updated: 2026-08-31; verified: 2026-09-25.
- Binance·Binance Stocks FPSL (Fully Paid Securities Lending) HODL Leaderboard, page published or updated: 2026-07-08; verified: 2026-09-25.
- Foresight News·Binance stock lending product FPSL officially launched, page published or updated: 2026-06-11; verified: 2026-09-25.
