What is a SWIFT Code?
Understanding SWIFT/BIC Codes
When you make an international payment, banks will ask you for some key pieces of information to ensure your fund transfer will be sent to the right bank and recipient. Among other requirements, you’ll need to provide a bank identification code: a SWIFT address.
What is a SWIFT Code?
The SWIFT fund transfer and messaging system is a standardized method in making international banking transactions. Not only does the SWIFT system allow banks to share vital financial data with other banks, it also ensures that international bank transfers are successfully carried out. Through SWIFT, banks can see the status of the account, debit and credit amounts, and other important details related to the transaction.
Prior to the development of bank identification methods such as SWIFT and IBAN, there was no internationally recognized system. This lack of standard practice led to costly errors and missed or delayed payments.
Today, SWIFT and BIC codes, along with the IBAN, are used to help banks and financial institutions ensure fast and successful fund transfers around the globe. Bank identifier codes are also used in domestic payments, specifically in direct debits and credit transfers.
SWIFT vs. BIC vs. IBAN: What’s the Difference?
BIC stands for Bank Identifier Code, which serves as the ID of a beneficiary bank involved in international transactions. SWIFT, or Society for Worldwide Interbank Financial Telecommunication, owns and oversees the BIC system.
SWIFT codes are standard format BICs, and as such, the acronyms SWIFT and BIC are used interchangeably. If you encounter either SWIFT or BIC when sending or receiving trans-national payments, you’re being asked for the same information. For clarity, especially in online searches, SWIFT/BIC is often used.
The IBAN, on the other hand, stands for International Bank Account Number and is used to identify the bank account of the recipient. It is utilized along with the SWIFT/BIC codes to ensure funds go to the right destination. Think of IBAN as your name and home address while the SWIFT/BIC is an international postal ID for banks and financial institutions.
SWIFT/BIC codes are generally composed of 8-11 characters, while an IBAN is as long as 14-35 characters.
Ways to Find a Bank’s SWIFT/BIC code
To find your recipient’s bank identifier code, the first step is to look for a sequence of 8 to 11 characters. A SWIFT code’s structure looks like this:
Each set of characters provides vital information to make sure your money is transferred to the correct destination:
- 4 character bank code in letters, typically a shortened version of the institution’s name
- 2 character country code in letters, stating the country the bank is in
- 2 character location code, either in letters or numbers, representing the bank’s head office
- Optional 3-character branch code, either in letters or numbers, specifying a particular branch. “XXX” signifies the head office
When recording a SWIFT/BIC, make sure that you copy all the characters correctly and check whether the length has the right character count or not. A bank SWIFT code can be found in the following:
- The official website of the recipient’s bank
Take advantage of the website’s search tool, if there’s one, to find the SWIFT code. If you can’t find it on the bank’s home page, it’s worth looking into their FAQs and international payment links.
- Paper copy of the recipient’s bank statement
If you’re seeking out your own bank SWIFT code, you can look no further than your hard copy of the bank statement. You may also log into your bank account online and find the SWIFT/BIC there.
- Online SWIFT/BIC tool
Several websites provide complete lists of banks and their SWIFT codes to help you find the information you need in a few clicks.
You may also call the recipient or their bank and directly ask for the SWIFT code. Take note that international calls can incur fees, so it’s better to look online first.
If you’re a business owner making multiple overseas transactions daily in numerous countries, it’s a good idea to keep a list of SWIFT/BIC codes handy for quick reference. Find out if your recipient’s country requires a SWIFT/BIC by searching through the following list:
- American Samoa
- Antigua And Barbuda
- Bolivia, Plurinational State Of
- Bonaire, Sint Eustatius, and Saba
- Bosnia And Herzegovina
- Brunei Darussalam
- Burkina Faso
- Cape Verde
- Cayman Islands
- Central African Republic
- Congo, The Democratic Republic Of The
- Cook Islands
- Costa Rica
- Cote D'Ivoire
- Czech Republic
- Dominican Republic
- El Salvador
- Equatorial Guinea
- Eritrea (The State Of)
- Falkland Islands (Malvinas)
- Faroe Islands
- French Guiana
- French Polynesia
- Marshall Islands
- Micronesia (Federated States Of)
- Moldova, Republic Of
- Montenegro, Republic Of
- New Caledonia
- New Zealand
- North Macedonia
- Northern Mariana Islands
- Palestine, State Of
- Papua New Guinea
- Puerto Rico
- Russian Federation
- Saint Kitts And Nevis
- Saint Lucia
- Saint Pierre And Miquelon
- Saint Vincent And The Grenadines
- San Marino
- Sao Tome And Principe
- Saudi Arabia
- Serbia, Republic Of
- Sierra Leone
- Sint Maarten (Dutch Part)
- Solomon Islands
- South Africa
- South Sudan
- Sri Lanka
- Syrian Arab Republic
- Tanzania, United Republic Of
- Trinidad And Tobago
- Turks And Caicos Islands
- United Arab Emirates
- United Kingdom
For a complete list of bank identifier codes per country, you can search the required information online with your favorite search engine.
A Note on Exchange Rates and Intermediary Fees
Whenever you pay someone overseas, chances are you and your recipient have different currencies and the funds are converted to the recipient’s currency. However, the exchange rate you see when you search online may not be the actual rate you’ll be paid upon making the transaction. Inevitably, exchange rates vary across banks and transfer services.
Bad exchange rates can cost you more money. Often, financial institutions mark-up exchange rates for profit, typically by 4-6% or above the mid-market rate. As a result, you’ll be paying a hidden fee, making the fund transfer more expensive than it should be. To avoid paying unreasonable and costly fees, compare your ideal exchange rate to the mid-market rate before doing business with a transfer service.
On top of the exchange rate, transactions that utilize the SWIFT system generally go through 1-3 intermediary banks that individually charge a fee. All these fees add up to the overall cost of your fund transfer. To get a good deal, always do your research so you can have budget-friendly options to choose from.
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