An accrual swap in which any breach (touch) of the range upper or lower boundary terminates all further potential for accruing interest payment. A one-touch swap is, more specifically, an interest rate swap under which a party pays a floating rate such as three-month LIBOR and receives a floating rate plus a specific spread. Interest payments to this party will only accrue on days (or another reference period) when rates remain within a certain range formed by pre-determined upper and lower boundaries. In such a swap, any downward or upward breaking of the underlying rate out of the range means interest ceases to accrue further, and the swap is no more active.

This swap is also known as a one-touch swap.