IBAN vs Account Number

In this guide we will be discerning the main similarities and differences between an IBAN and an account number. These are both types of bank codes called upon during money transfers: one is designed to streamline cross-border transactions, while the other is used to facilitate domestic payments.

The information included in this article is designed to help any readers struggling to differentiate between IBANs and account numbers, in order to ensure all future money transfers and simple, easy and fast.

What is an IBAN?

IBAN stands for International Bank Account Number, a code used around the world to identify individual bank accounts. They are required to identify the correct overseas bank account during a cross-border transaction.

What is an account number?

An account number is a unique set of numbers used to identify a specific bank account. If you have multiple bank accounts each of them will have its own account number. An account number provides information that is required to receive domestic money transfers.

What is the Format of an IBAN/Account Number?

Made up of alphanumeric characters, an IBAN can be no more than 34 characters long. An example of an IBAN: AA-BB-CCCC-DDDDDD-EEEEEEEE

This code can be broken down into the following information:

[AA] country code: this identifies the country where the bank account is located

[BB] check digits: this enables the sending bank to perform a security check of the routing destination

[CCCC] bank identifier: this code identifies the account holder’s bank

[DDDDDD] sort code

[EEEEEEEE] account number

Once you have found an IBAN number, it is easy to identify an account number: they are the last 8 - 12 digits of your IBAN. Using the previous example, the account number would be [EEEEEEEE].

This will be the account number associated with whatever account is receiving funds and will have been assigned to the customer when opening the account.

When Will You Need an IBAN/Account Number?

As the name suggests, an International Bank Account Number is used for sending and receiving interbank transfers from overseas contacts. They may also be called for during other international payment procedures such as setting up a wire transfer.

When making a credit transfer or authorising a direct debit, customers will need to provide the account number of the beneficiary to enable the transfer. When sending money through an online money transfer provider directly to the recipient’s bank, customers will be asked to provide the recipient’s account number. Ordinarily, an account number will be used alongside a sort code.

Who Uses an IBAN/Account Number?

The IBAN format is used mostly within the EU, but it is also used by financial institutions across the Caribbean, Middle East and Africa. One key global market that does not use IBAN is the United States. However, if you are based in the US and making a transfer to an account in Europe, it’s likely that you’ll need your recipient’s IBAN.

Account numbers are commonplace and used around the world, but the banking details they are accompanied by will depend entirely on the country.

For example, in the UK, an account number and sort code ordinarily work in conjunction to facilitate a money transfer. In the US, an account number will be used in conjunction with a routing number, to process a money transfer.

Where Can I Find an IBAN/Account Number?

If you don’t have your IBAN to hand, you will be able to find out the number on your bank statements or online/mobile banking portal. Anywhere you can find your IBAN, you’ll be able to get your account number.

Summary

As two very similar sounding financial terms, you would be correct for assuming these banking terms are interlinked. A bank account number can be derived from an IBAN, and being able to decode an IBAN is a helpful trick for anyone making regular global money transfers. We have written a number of guides about IBANs, account numbers, routing numbers, BIC and SWIFT codes, for anyone who needs to grasp the purpose of each. Before arranging a remittance, check out our money transfer search engine tool and explore our related content section below.

Cheaper Alternatives to Bank Transfers

Bank transfers are not the cheapest way to send money internationally. If you want to save money, then switching to a specialist transfer provider is the way to go. Companies like Wise and XE Money Transfer are in a position to offer better deals because they have lower overheads.

The FX rates charged by banks have a markup percentage that is significantly higher than what alternative transfer providers offer. In fact, many companies match the mid-market rate for most currency pairs.

Also, you can enjoy lower fees when using an alternative to banks. For example, TorFX charges no fees irrespective of how much money you are sending. This means you do not need to pay $20 to $50 per transfer.

Related Content