# FX Forward Points Calculator > Free FX forward points calculator. Enter the spot rate, the two currencies' interest rates and days to get the forward rate, forward points and premium. Source: https://learn.tradelabsai.com/tools/fx-forward-points-calculator/ Track: Calculators · Level: Beginner · Updated: 2026-10-03 Publisher: TradeLabs AI (https://tradelabsai.com). Education, not financial advice. Cite as: TradeLabs Learn, "FX Forward Points Calculator", https://learn.tradelabsai.com/tools/fx-forward-points-calculator/ A currency forward locks in an exchange rate for a future date. Its price is not a forecast; it comes from the interest rates of the two currencies, through covered interest rate parity. If dollar interest rates are higher than euro rates, the euro trades at a premium in the forward market, so that holding either currency and hedging earns the same. Forward points are the difference between the forward and spot rates, quoted in pips. This calculator gives the forward rate, the points and the annualised premium or discount. ## Calculator *Interactive calculator: use it at https://learn.tradelabsai.com/tools/fx-forward-points-calculator/* ## How it works ``` Forward = Spot × (1 + Quote rate × Days / Basis) / (1 + Base rate × Days / Basis) Forward points = (Forward - Spot) × Multiplier ``` This uses simple money market interest for short periods. In practice, each currency has its own day count convention and the rates used are interbank or overnight index rates; the calculator uses one basis for both, which is a close approximation. See [Covered and Uncovered Interest Parity](https://learn.tradelabsai.com/forex/interest-rate-parity/) and [FX Forwards and Forward Points](https://learn.tradelabsai.com/forex/fx-forwards-and-forward-points/). **Example: A 90 day EUR/USD forward** EUR/USD spot is 1.0800, US dollar rates are 4.5% and euro rates are 2.5%. Over 90 days on a 360 day basis, the forward is 1.08 times 1.01125 divided by 1.00625, about 1.08537. Forward points are about plus 53.7 pips. The euro trades at a forward premium because euro rates are lower: an investor who holds euros earns 2% a year less interest and is compensated by a better exchange rate in the forward contract. The annualised premium, about 2%, matches the rate difference. See [Interest Rate Differentials](https://learn.tradelabsai.com/forex/interest-rate-differentials/). ## Premium and discount | Interest rates | Base currency forward | Points | |---|---|---| | Quote rate higher than base rate | Premium (forward above spot) | Positive | | Quote rate lower than base rate | Discount (forward below spot) | Negative | | Equal rates | Forward equals spot | Zero | A forward discount does not mean the market expects the currency to fall; it reflects the interest rate difference. ## Who uses forwards | User | Purpose | |---|---| | Importers and exporters | Lock in exchange rates for future payments | | Investors with foreign assets | Hedge currency risk. See [Hedging](https://learn.tradelabsai.com/markets/hedging/) | | Carry traders | Earn the interest difference, accepting spot risk. See [Carry Trades in Forex](https://learn.tradelabsai.com/forex/carry-trades-in-forex/) | | Banks and funds | Roll positions through FX swaps. See [FX Swaps and Currency Swaps](https://learn.tradelabsai.com/forex/fx-swaps-and-currency-swaps/) | ## Forward points and rollover Retail forex traders holding positions overnight receive or pay swap charges, which are based on the same forward points, adjusted for broker markups. A position long the higher yielding currency usually earns a small amount each night; short positions pay. See [Rollover and Swap in Forex](https://learn.tradelabsai.com/forex/rollover-and-swap-in-forex/). ## Beyond parity Covered interest parity held very closely before 2008. Since then, persistent deviations known as the cross currency basis have appeared, reflecting demand for dollar funding and limits on bank balance sheets. For most purposes the formula is accurate enough, but large institutions price the basis explicitly. See [Cross-Currency Basis](https://learn.tradelabsai.com/forex/cross-currency-basis/). ## Frequently asked questions ### How are FX forward rates calculated? By adjusting the spot rate for the interest rate difference between the two currencies over the period, using covered interest rate parity. ### What are forward points? The difference between the forward rate and the spot rate, expressed in pips, added to spot to get the forward rate. ### Does a forward premium predict the currency will rise? No. It reflects the interest rate difference, not a forecast of future spot rates. You have finished the Calculators section. Continue with the reference pages, starting with the [Trading Glossary A to Z](https://learn.tradelabsai.com/reference/trading-glossary-a-to-z/). ## Continue learning - Previous lesson: [Futures Basis and Forward Price Calculator](https://learn.tradelabsai.com/tools/futures-basis-calculator/) - Related: [Futures Basis and Forward Price Calculator](https://learn.tradelabsai.com/tools/futures-basis-calculator/): Free futures basis calculator. Enter spot and futures prices, days to expiry, interest rate and yield to get the basis, cost of carry fair value and implied rate. - Related: [FX Forwards and Forward Points](https://learn.tradelabsai.com/forex/fx-forwards-and-forward-points/): An FX forward fixes an exchange rate for a future date. Learn how forward rates and forward points are calculated from interest rates, with examples and uses. - Related: [Covered and Uncovered Interest Parity](https://learn.tradelabsai.com/forex/interest-rate-parity/): Interest rate parity links exchange rates and interest rates. Learn covered and uncovered parity, the arbitrage behind them and the forward premium puzzle. - Related: [Carry Trades in Forex](https://learn.tradelabsai.com/forex/carry-trades-in-forex/): A forex carry trade buys a high yielding currency funded by a low yielding one. Learn how it earns, famous unwinds, funding currencies and how to manage crash risk. - Related: [FX Swaps and Currency Swaps](https://learn.tradelabsai.com/forex/fx-swaps-and-currency-swaps/): An FX swap exchanges currencies now and reverses later; a cross currency swap exchanges interest payments for years. Learn both, their pricing and their uses. - Related: [Interest Rate Differentials](https://learn.tradelabsai.com/forex/interest-rate-differentials/): The gap between two countries' interest rates is a major driver of exchange rates. Learn why differentials move currencies, how to track them and their limits.