An interest rate swap (IRS) that entails the payment of a referenced floating rate (a floating rate linked to a given reference rate) by one party against the payment of a floating rate plus a specific spread. Payment of the floating rate depends on the reference rate remaining within a pre-agreed  range (defined by a lower and upper boundaries). In other words, the payment will accrue within the range only, and will become payable at the pre-specified fixing dates.

In its economic effect, this swap is similar to a mini-max floating rate note (mini-max floater).

This swap is also known as a range swap or an accrual swap.