A standard swap structure in which swaps have generic or well-defined features, especially in relation to coupons, notional principal, swap legs, etc. For example, a vanilla interest rate swap is an agreement in which a company agrees to pay a stream of cash flows equal to interest at a prespecified fixed rate on a notional amount for a specific period. The company receives, in return, a promise from a counterparty to pay a stream of cash flows computed as interest at a floating rate on the same notional amount for the same period of time. This form of swap is the simplest, embedding no add-ons or additional features.

At initiation, most vanilla swaps have an no economic value, i.e., neither counterparty would be required to pay the other any amount at that early stage.

Vanilla swaps (opposite of flavored swaps) are also known as basic swaps.