diff --git a/src/utils/init/utils.js b/src/utils/init/utils.js
index 85daf038a0a..816be700254 100644
--- a/src/utils/init/utils.js
+++ b/src/utils/init/utils.js
@@ -41,7 +41,7 @@ const getDefaultSettings = async ({ siteRoot, config }) => {
   return {
     defaultBuildCmd,
     defaultBuildDir: normalizeDir({ siteRoot, dir: defaultBuildDir, defaultValue: '.' }),
-    defaultFunctionsDir: normalizeDir({ siteRoot, dir: defaultFunctionsDir, defaultValue: 'functions' }),
+    defaultFunctionsDir: normalizeDir({ siteRoot, dir: defaultFunctionsDir, defaultValue: 'netlify/functions' }),
   }
 }