What are IBANs and SWIFT codes?
Don’t know your IBAN from your elbow? If you ever find yourself getting bogged down in banking terms, read on. Our useful guide will tell you what they are, who uses them and why you might need them.
Don’t know your IBAN from your elbow? If you ever find yourself getting bogged down in banking terms, read on. Our useful guide will tell you what they are, who uses them and why you might need them.
What’s an IBAN?
IBAN stands for International Bank Account Number. This is something you may need if you’re making or receiving international payments.
IBANs identify your country, your bank and your individual bank account. They’ve become a key part of the banking landscape in recent years, as they make sending money abroad easier and safer.
An IBAN consists of:
- a country code
- two numbers called ‘check digits’
- a bank identifier code
- your sort code
- your account number
Each country has its own individual code and number length.
What are IBANs used for?
Banks use IBANs to verify your account information. They’re basically a way of ID-ing you.
If you’re making or receiving an international payment, IBANs make it easier for banks to check they’ve got your transaction details right. That’s why IBANs go a long way towards helping prevent fraud and banking errors.
Does my IBAN replace my sort code and account number?
No, not at all. You’ll use your sort code and account number to make and receive payments to and from UK bank accounts. You’ll only need to use your IBAN when making and receiving international payments.
Which countries require an IBAN number?
There are currently 77 countries around the world using IBANs, including most European countries – as well as the United Arab Emirates and Turkey.
Did you know?Banks in some countries, such as the USA, Canada and Australia, don’t use IBANs. Australia, for example, uses a BSB (bank, state, branch) identifier and account number instead. The USA and Canada only use SWIFT codes (which stands for Society for Worldwide Interbank Financial Telecommunication) to receive international bank transfers. However, they do recognise the IBAN system and will still process IBAN payments when dealing with international transactions. But it does mean you may have to pay additional fees to each bank the money has to pass through before it reaches the recipient. |
How do I find my IBAN?
You should be able to track down your IBAN on your bank statement or via your online banking service.
Failing that, most banks have an online tool allowing you to generate your own IBAN. Simply visit your bank’s website to see if it has this function. You’ll need to have your sort code and account number to hand.
If in doubt, you can always call your bank to ask.
What’s a SWIFT code?
A SWIFT code, sometimes referred to as a SWIFTBIC code or SWIFT number, is an ID for banks. Every bank and financial organisation has its own SWIFT code. This lets you know who they are and where they’re based.
A number of Russian banks are currently excluded from the SWIFT system, following the invasion of Ukraine.
What’s a BIC?
BIC stands for Bank Identifier Code, which is pretty self-explanatory. It’s a SWIFT code by another name and serves exactly the same purpose – to identify a bank worldwide.
Bank Identifier Codes allow banks to send automated payments speedily and accurately. The code lets your bank know exactly which bank (and sometimes even branch) it’s dealing with.
BIC and SWIFT codes are a shorthand that let you identify:
- The name of a bank
- What country the bank is based in
- What city the bank is in
- The bank’s address.
What’s the format of a SWIFT or BIC code?
BIC or SWIFT codes are 8-11 characters long. They’re formatted as follows:
- 4-letter bank code
Usually a shortened version of the bank’s name. For example, Halifax’s code is HLFX. - Country code
Two letters that tell you which country the bank is in - Location code
A two-digit code telling you where the bank’s head office is based. - Branch code
Three digits that let you know where the branch is.
How do I find a BIC code?
Online you’ll find many websites that can tell you your bank’s BIC or SWIFT code, depending on what your bank calls it. These sites usually let you search by country and bank name.
What’s the difference between a BIC code and an IBAN?
BIC or SWIFT codes aren’t the same as IBANs. The big difference is:
- BIC/SWIFT codes identify your bank’s branch for international payments.
- IBANS identify your bank account for international payments.
BIC/SWIFT codes are used throughout the world, while IBANs are more popular in Europe.
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Frequently asked questions
How safe is an IBAN?
IBAN numbers are considered one of the safest methods to send and receive money abroad. While people can use your IBAN to put money into your account, they can’t withdraw or transfer funds from your account. This means that using your IBAN should be completely secure.
However, you should never give out your IBAN and personal details if you can’t verify who you’re giving them to. That’s why you should always confirm the bank identity of the recipient whenever you make a payment.
What’s the difference between a SWIFT and SEPA payment?
While a SWIFT code can be used for international payments in any part of the world, SEPA payments (Single Euro Payments Area) can only be used in the EU, EEA and the UK.
SEPA is a European initiative, introduced to make cross-border cashless payments quicker, cheaper and easier for EU countries that use the euro.
The main differences between SWIFT and SEPA are:
- For SWIFT payments the sender and recipient may be charged currency conversion, administration and intermediary bank fees
- SEPA payments are usually free of charge
- SWIFT payments can be made in any currency
- SEPA payments can only be made in euros
- SEPA payments can also be set up as a direct debit
- SEPA transfers can often be instant or same day
- SWIFT payments can take up to four working days.
What’s the cheapest way to send money abroad?
While you may think it’s less hassle to send money abroad via your current account, bank fees can often be costly and the exchange rate might not be the best.
Dedicated online transfer providers often charge much less and offer favourable exchange rates. They may be a better option for one-off transfers for smaller amounts – for example, sending Christmas or birthday money to family abroad. However, you might need to set up an account with the provider to be able to use their services.
Find out more about sending money abroad in our guide to international money transfers.
