In this guide we will outline the meaning of a bank code, what they are used for and the various types of codes that are used by banks and other financial institutions around the world.
A bank code is an umbrella term used to describe alphanumeric codes that identify financial institutions. Sometimes bank codes are used domestically to reference banks located within the same country, while other bank codes are used to ID financial institutions abroad.
The rules that distinguish different types of bank codes will be determined by the central bank or governing body which has issued the code. This means the format, length and appearance of a bank code will differ from country to country, and no two bank codes will ever be the same.
The term “bank code” is sometimes misappropriated by merchants and vendors, who use it in reference to the security code on a credit or debit card. The correct name for this (typically 3-digit) is a Card Security Code or CSC.
SWIFT codes are used by the Society for Worldwide Interbank Financial Telecommunication network to identify a bank’s location, country, and branch number when processing an international money order. A SWIFT code will be 8 to 11 characters long and can be located on bank statements, in your online banking or by contacting your bank directly.
BIC code is a term interchangeable with SWIFT code as they both describe exactly the same thing. Like SWIFT codes, BIC codes are required when transferring funds internationally to an overseas bank account. This type of code is used by financial service providers, as a way of identifying exactly where your money needs to be sent to.
A clearing code – clearing number or National Clearing Code (NCC) – is called for when you are sending money to a bank account that does not have an International Bank Account Number (IBAN). This type of bank code also goes by another name: Routing Number. Typically, a clearing code will not be needed if you have SWIFT/BIC code or an IBAN and are generally used for payments outside of the European Economic Area (EEA).
An IBAN stands for International Bank Account Number and this is a code made up of no more than 34 letters and numbers. IBANs are used as a unique identifier for bank accounts when sending and receiving international payments. IBANs are used by banks all around the world to pinpoint the country, bank, and bank account that funds should be deposited to when moving money across borders.
Sort codes are used by British and Irish banks to identify the location of a domestic bank, so that financial institutions can recognise where the payment has originated from or validate where it is being sent to. Also known as sorting codes, or a national sort code (NSC) in Ireland, these codes can be found integrated into an IBAN (International Bank Account Number) but they have no relation to SWIFT or BIC codes.
April is a journalist and full-time content writer for MoneyTransfers.com. Over the last decade she has written for a number of different online and print publications. Having lived overseas in Canada and Vietnam, April hopes to see more of the world as soon as possible, with Japan at the top of her travel list. As a former expat, April has first-hand experience of managing finances from overseas. She enjoys writing about forex trends and the future of banking.