Which type of swap involves interest payments that do not start until a future date?

The type of swap that involves interest payments starting at a future date is indeed the forward swap. A forward swap is established today, but the actual exchanges of cash flows do not begin until a predetermined future date. This structure allows counterparties to lock in an interest rate for the future while deferring the actual cash flows associated with those rates until the swap begins. This can be particularly useful for entities that anticipate changes in interest rates or wish to manage future interest rate exposure without incurring immediate cash flow effects.

In contrast, other swap types have different characteristics. For example, a plain vanilla swap typically involves immediate exchange of fixed and floating interest payments from the start of the agreement. A callable swap includes a feature that allows one party to terminate the swap early under certain conditions, but it does not inherently delay the start of payments. Lastly, a zero-coupon-for-floating swap often involves fixed payments at maturity rather than periodic interest payments, but again, it does not involve a deferred payment start date in the way that a forward swap does. Therefore, understanding the workings of forward swaps helps clarify the timing and cash flow considerations involved in such financial instruments.