No matter how many times you make an overseas money transfer, remembering what different banking terms mean can be a struggle. What does IBAN stand for? Is it the same as a SWIFT code? In this guide we will provide a run through of these two different types of bank codes, looking specifically at the format and function of each.
An International Bank Account Number – more commonly known in its shorter form IBAN – is a bank code consisting of up to 34 letters and numbers. It is used as a unique identifier for bank accounts around the world when initiating international money transfers. An IBAN contains the account holder’s country, bank, and bank account and is used to ensure funds are deposited to the right account.
SWIFT codes are another type of bank code, internationally recognised by banks and financial institutions as a method of identification when transfering money overseas. SWIFT codes are issued by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) and should not be confused with IBANs.
SWIFT codes are shorter than IBAN numbers – made up of 8 to 11 characters – but they serve a similar purpose: to provide crucial details during the process of transferring funds to an overseas bank account. SWIFT codes include the bank’s address, branch number and destination country of the relevant global remittance. SWIFT codes may also be referred to as a BIC: this stands for Business Identification Code.
IBANs and SWIFT codes are both used to identify and facilitate international money transfers but the key difference between the two lies in the information that each code conveys. An IBAN is a unique identifier of an individual account, while a SWIFT code specifies the bank.
IBANs and SWIFT codes are both used as methods of communicating bank account information during an international money transfer. We will run through a few country-specific scenarios to illustrate when an IBAN or SWIFT code will be needed:
Understanding the differences between IBANs and SWIFT codes is all about understanding what each bank code represents: IBANs are a way to identify an individual account during an overseas transaction; SWIFT codes are used to communicate the specific bank which is due to receive funds as part of an overseas transaction. We have written a number of technical guides on similar topics related to banking terms and bank codes, you can find them in the Related Content section below. If you are ready to send money overseas, give our comparison engine a whirl, to find the best value transfer for your international payment.
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.