NDF and NDS are both types of derivative contracts that allow investors to trade in currencies that are not freely traded. Non-deliverable forward (NDF) is a cash-settled contract, which means that the two parties to the contract do not actually exchange the currencies. Instead, they settle the contract in cash at the predetermined exchange rate on the settlement date. Non-deliverable swap (NDS) is a physically settled contract, which means that the two parties to the contract actually exchange the currencies on the settlement date.