diff --git a/channeld/channel_wire.csv b/channeld/channel_wire.csv
index 1122b06e5..c681ae6c7 100644
--- a/channeld/channel_wire.csv
+++ b/channeld/channel_wire.csv
@@ -18,6 +18,7 @@ msgdata,channel_init,their_config,channel_config,
 msgdata,channel_init,fee_states,fee_states,
 msgdata,channel_init,feerate_min,u32,
 msgdata,channel_init,feerate_max,u32,
+msgdata,channel_init,feerate_penalty,u32,
 msgdata,channel_init,first_commit_sig,bitcoin_signature,
 msgdata,channel_init,per_peer_state,per_peer_state,
 msgdata,channel_init,remote_fundingkey,pubkey,
@@ -178,6 +179,7 @@ msgtype,channel_feerates,1027
 msgdata,channel_feerates,feerate,u32,
 msgdata,channel_feerates,min_feerate,u32,
 msgdata,channel_feerates,max_feerate,u32,
+msgdata,channel_feerates,penalty_feerate,u32,
 
 # master -> channeld: do you have a memleak?
 msgtype,channel_dev_memleak,1033
diff --git a/channeld/channeld.c b/channeld/channeld.c
index ba9215672..7523bf69b 100644
--- a/channeld/channeld.c
+++ b/channeld/channeld.c
@@ -84,6 +84,9 @@ struct peer {
 	/* Tolerable amounts for feerate (only relevant for fundee). */
 	u32 feerate_min, feerate_max;
 
+	/* Feerate to be used when creating penalty transactions. */
+	u32 feerate_penalty;
+
 	/* Local next per-commit point. */
 	struct pubkey next_local_per_commit;
 
@@ -2816,7 +2819,8 @@ static void handle_feerates(struct peer *peer, const u8 *inmsg)
 
 	if (!fromwire_channel_feerates(inmsg, &feerate,
 				       &peer->feerate_min,
-				       &peer->feerate_max))
+				       &peer->feerate_max,
+				       &peer->feerate_penalty))
 		master_badmsg(WIRE_CHANNEL_FEERATES, inmsg);
 
 	/* BOLT #2:
@@ -3110,7 +3114,9 @@ static void init_channel(struct peer *peer)
 				   &minimum_depth,
 				   &conf[LOCAL], &conf[REMOTE],
 				   &fee_states,
-				   &peer->feerate_min, &peer->feerate_max,
+				   &peer->feerate_min,
+				   &peer->feerate_max,
+				   &peer->feerate_penalty,
 				   &peer->their_commit_sig,
 				   &peer->pps,
 				   &funding_pubkey[REMOTE],
diff --git a/lightningd/channel_control.c b/lightningd/channel_control.c
index 7fcb25580..6fa422341 100644
--- a/lightningd/channel_control.c
+++ b/lightningd/channel_control.c
@@ -38,7 +38,8 @@ static void update_feerates(struct lightningd *ld, struct channel *channel)
 
 	msg = towire_channel_feerates(NULL, feerate,
 				      feerate_min(ld, NULL),
-				      feerate_max(ld, NULL));
+				      feerate_max(ld, NULL),
+				      try_get_feerate(ld->topology, FEERATE_PENALTY));
 	subd_send_msg(channel->owner, take(msg));
 }
 
@@ -480,6 +481,7 @@ void peer_start_channeld(struct channel *channel,
 				      channel->channel_info.fee_states,
 				      feerate_min(ld, NULL),
 				      feerate_max(ld, NULL),
+				      try_get_feerate(ld->topology, FEERATE_PENALTY),
 				      &channel->last_sig,
 				      pps,
 				      &channel->channel_info.remote_fundingkey,
@@ -819,7 +821,8 @@ static struct command_result *json_dev_feerate(struct command *cmd,
 
 	msg = towire_channel_feerates(NULL, *feerate,
 				      feerate_min(cmd->ld, NULL),
-				      feerate_max(cmd->ld, NULL));
+				      feerate_max(cmd->ld, NULL),
+				      try_get_feerate(cmd->ld->topology, FEERATE_PENALTY));
 	subd_send_msg(channel->owner, take(msg));
 
 	response = json_stream_success(cmd);