An interest rate swap or a cross-currency swap in which payments are put off for a specified time in the future. That is, the parties to the swap don’t begin to exchange interest payments until some future date. The deferred swap is also liberally known, sometimes, as a forward swap. However, and unlike a forward swap, where the entire swap is scheduled to start later, in a deferred swap the two counterparties agree to defer only the payments. For example, a firm willing to enter a swap but not in need of cash flows until a future period, may seek to seal the deal today and defer payments till a date it deems fit.

The deferred swap is also called a deferred start swap.