Many banks and other financial institutions offer domestic wire transfer services to their customers.
A bank transfer code is a string of numbers and letters that identifies an account to which the money will be transferred. Some common transfer codes are IBAN, SWIFT or BIC. When making a domestic bank transfer, all that is needed is the bank code, the routing number, and the receiving account number. To complete a foreign bank transfer, additional information such as the country code may also be requested.
In the European Economic Area and many other participating countries, such as Saudi Arabia and Israel, the International Bank Account Number (IBAN) is the norm. It consists of a two-letter country code. This is followed by a two-digit verification code. The following alphanumeric code contains up to 30 characters and varies from country to country. It contains the bank code and account number and may contain an electronic transfer routing number and a supplemental check code. A fictitious example of a German IBAN is DE99 2032 0500 4989 1234 56.
To make a bank transfer in other countries, such as Japan and the United States, you generally need the Society for Worldwide Interbank Financial Communications (SWIFT) bank transfer code. SWIFT registers banking institution codes (BICs), so the codes are sometimes called SWIFT codes and sometimes BIC codes. The BIC code contains a four-letter bank identification code, a two-letter country identification code, a two-letter country code, and an optional three-letter branch code. The BIC code for Deutsche Bank in Frankfurt, for example, is DEUTDEFF.
The main difference between the IBAN bank transfer code and the SWIFT/BIC bank transfer code is that the IBAN contains all the information necessary to credit a specific account. The SWIFT/BIC code only contains the information of the destination bank. Supplementary information, such as account and routing numbers, must be reported separately. Since each country has its own accounting syntax, errors can occur when transferring money internationally without the IBAN.
Many companies offer to make a direct bank transfer to an employee’s account, avoiding the expense of cutting and mailing checks. In the United States, the routing number and the American Banking Association (ABA) account number are required. This information is located at the bottom of the check, starting from the left. The first nine digits are the routing number. The next twelve digits are the account number.
Banks now offer free wire transfers between checking accounts and utilities and other banks to attract customers. The bank usually has a business relationship with the recipient and does not require the bank transfer code. An account number may be enough.