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IBAN vs Routing number

Understanding the difference between an IBAN and a routing number will massively benefit both parties involved in an international money transfer. In this guide we will present the distinguishing features of both, looking at the similarities and differences between the two identification codes. 

Updated: 27/07/2022
Read time: 4 minutes
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An IBAN, or International Banking Account Number, is a standardised system of identifying bank accounts around the world when processing international payment requests. Routing numbers, however, are a US-based identification system and should not be confused with the former.  

If you are sending or receiving money from a contact who is located outside of your country of residence, you are likely to be asked for an IBAN or a routing number, depending on where both parties are based. 

To clarify the difference between these two banking terms, we will dig into the characteristics, format and usage of both in this article.

What is an IBAN/Routing number?

IBAN

IBAN stands for International Bank Account Number, and it is used to identify the unique information of a bank account in any of the 82 countries that use the IBAN system.

Routing number

A routing number can also be known as an ABA routing number, an RTN, or a routing transit number. 

Since 1910 these numbers have been used to identify banks in the United States , so any customers opening a bank account there will be issued a routing number.

What is the format of an IBAN/Routing number?

IBAN

IBAN numbers are made of up to 34 – 35 alphanumeric characters, consisting of a two digit country code, two check numbers, a four digit bank code, a six digit bank branch code and an eight digit bank account number.

Routing number

A routing number is a set of nine-digits that are unique to your bank’s location. This information is used to ensure funds reach the correct destination efficiently and securely.

How does an IBAN/Routing number work?

IBAN

IBAN codes will be required when a customer is arranging an overseas payment sent directly to someone’s bank account. They are used by banks to identify the location, bank, and bank account a payment needs to be made to, by providing a globally recognised format of information.

Routing number

In the US, routing numbers are an essential part of financial transactions. They are required to clear funds when sending or receiving a domestic or international money transfer process, or processing a check.

Who uses an IBAN/Routing number?

IBAN

The IBAN system is an internationally agreed upon method for identifying financial institutions during the process of transferring money overseas. It was originally adopted by the European Committee of Banking Standards (ECBS) in 1997 but has since been extended by the SWIFT (Society of Worldwide Interbank Financial Telecommunication) network, to include countries outside of the Eurozone.

Routing number

Only customers at federally chartered and state-chartered US banks that are eligible to maintain an account at a Federal Reserve Bank are issued routing numbers. If you are sending money to a beneficiary in the US, you will likely need their routing number.

Where can I find an IBAN/Routing number?

IBAN
  • Log into your online banking account
  • Check a bank statement
  • Visit your local bank branch
  • Use an IBAN calculator
Routing number
  • Visit your bank’s website
  • Log into your online banking account
  • Telephone your bank 
  • Visit your local branch
  • Use a routing number generator online
  • Have a look at a personal check or bank statement: the routing number should be printed at the bottom

When will I need an IBAN/Routing number?

IBAN

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

If you are making an international payment to a bank account in any of the 82 countries that use IBAN numbers, you may be required to provide this information. 

Routing number

You will  need a routing number in the following circumstances:

  • Transferring money internationally
  • Making a payment online or via the phone
  • Making a recurring automatic payment
  • Starting a direct deposit
  • Processing checks

Summary

When sending money to friends and family you will be asked for specific banking information, such as an IBAN or routing number. This information will be used to ensure your hard-earned money arrives safely with the correct recipient, without any kind of delay. The IBAN and routing number systems have both been developed to guarantee efficient payments when moving money from one country to another. 

If you want to find out more about the best way to securely send money online, check out our transparent comparison engine which can help you find the best way to send money for your specific transfer needs.

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Article Factchecked by Elliot Laybourne on 20th July 2022

Elliott is a former investment banker with a 20 year career in the city of London.

During this time he held senior roles at ABN Amro, Societe Generale, Marex Financial and Natixis bank, specialising in commodity derivatives and options market-making.

During this time, Elliott’s client list included Goldman Sachs, JP Morgan, Credit Suisse, Schroders Asset Management, and the Pennsylvania State Public School Employees Retirement System, amongst others.

April Summers

April is a trained journalist and the Content Editor for MoneyTransfers.com. She has 10 years experience writing about a diverse range of subjects, from financial services to arts and entertainment. When she’s not writing about global remittances she can be found daydreaming about her next holiday abroad.

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