A swap which initiates at a forward start date. In this swap the effective date is not the usual one or two business days (T+2) after the trade date, but longer time afterwards. For example, a forward-start swap may take effect 3 months after trade date. This swap is mainly useful for investors seeking to fix a hedge or cost of borrowing today (on the expectation that rates are set to rise in the future), but without effectively having to start the transaction right away. The calculation of the swap rate for such a swap is not different from that for a standard swap (vanilla swap).

This swap is also known as a deferred swap, a delayed-start swap or a forward swap.