interest rate swap

noun

A contract to exchange the benefit of one interest rate with another. Often a fixed interest rate is exchanged for a variable rate so as to allow one party to remove an exposure to a variable rate for which they pay a premium on the fixed rate in order to compensate for this 'insurance'. The two rates can also be based on different currencies.

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Meanings

nouninterest rate swap (plural interest rate swaps, abbreviation IRS)

plural interest rate swaps · abbreviation IRS

  1. businessA contract to exchange the benefit of one interest rate with another. Often a fixed interest rate is exchanged for a variable rate so as to allow one party to remove an exposure to a variable rate for which they pay a premium on the fixed rate in order to compensate for this 'insurance'. The two rates can also be based on different currencies.

Translations

Finnish koronvaihtosopimus
  • koronvaihtosopimusfinancial contract
German Zinsswap
  • Zinsswapfinancial contract
Cite this entry
APA

interest rate swap. (n.d.). In WatkinsX Dictionary. Retrieved November 5, 2026, from https://dictionary.watkinsx.com/word/interest%20rate%20swap

MLA

“interest rate swap.” WatkinsX Dictionary, https://dictionary.watkinsx.com/word/interest%20rate%20swap. Accessed November 5, 2026.

Chicago

WatkinsX Dictionary, s.v. “interest rate swap,” accessed November 5, 2026, https://dictionary.watkinsx.com/word/interest%20rate%20swap.

Source: interest rate swap on Wiktionary, CC BY-SA 4.0.