Swift codes or BIC codes are codes used to identify banks in international money transfers. These are codes used by banks to process your international transfer, making sure your money gets to the right place. Swift codes are used for international wire transfers.
Swift codes are often used interchangeably with BIC (Bank identifier code). All swift codes have 11 or 8 characters. The 11-digit code refers to a specific bank branch, while the 8-digit code refers to the bank’s head office. Swift codes are managed and issued by Society for worldwide interbank Financial Telecommunication (SWIFT).
Now you the meaning of swift code; it is used to identifier your bank branch when making an international wire transfer. If you are in Canada and want to send money to some in USA. Your need the swift code of the receiver’s bank. This will help identifier the account that the money is going to.
Swift codes help to avoid correct wrongs of transfer destination when making an international wire transfer. It ensures that you get your money in the right place (gets to the right receiver). I believe that I have answered your question “What is A swift Code?”
What Does A Swift Code Look Like?
Below is an in-depth analysis of what a swift code looks like. It contains 11 characters, sometimes they are 8 characters. On this page, I will be using 11 characters as examples. Below is an imaginary swift code.
It can be broken down into these part:
AAAA – BB – CC – DDD
Part 1: The first four characters “AAAA” identifies the bank (institution) global presence. This is the same for all their bank branches.
Part 2: This section of swift code, represents the country where the bank is located.
Part 3: This part represents the location of the bank branch.
Part 4: This section is peculiar to the bank branch receiving the money. No other bank will have the same code in this part. It varies from bank to bank.
Swift Codes Vs IBAN
You might be asking what the need for IBAN? Is it different from swift code? IBAN comes In-play depending on where you are sending the money to. Think of it this way – you are directing someone to a building, swift codes will guide the person just like a pathway or road path. While IBAN will help the place locate an apartment in the building.
IBAN is an international bank account number. It is used to identify a specific bank account in an institution. It is not used by all countries, for example: You will need IBAN to make transfers to countries in Europe but not required for payments to the USA.
Swift Code Vs BIC
I used BIC above when I was explaining the meaning of swift code. I know you have been wondering how they are related. Swift codes and BIC are the same. BIC stands for Business identifier code.
Are Swift Codes of A Bank Same for All The Branches?
The answer to this question is “NO”. Each bank branch has its own swift code. This swift code is unique to identify the bank branch that will hold the specific money you are sending.
It is always important to check the code required by your bank before making an international wire transfer.
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Remember don’t share your banking details with anybody.