You’ll most likely be asked for a SWIFT code whenever you want to transfer money abroad. Many people don’t understand what this code means. Some understand but don’t know where to find the accurate code for their banking institution. This article will explain the code, how it works, and where to find the right one for your bank transfer.
What Is A SWIFT Code?
SWIFT stands for Society for Worldwide Interbank Financial Telecommunications. It is the standard telecommunications system that banks across the globe use to send and receive instructions. A unique number identifies every bank connected to this network. Whenever your banking institution wants to communicate with another institution, it needs its specific code. Similarly, if a foreign banking provider wants to communicate with your local provider, it’ll need their code.
Think of SWIFT as the global mobile communication network you’re connected to. You have unique digits anyone can dial if they want to talk to you. That’s exactly how it is in the banking world.
What Do SWIFT Codes Look Like?
They consist of 8 to 11 characters:
- The first four letters identify the financial institution. It’s usually a shortened version of the institution’s name.
- The next two letters indicate the country the bank is located in.
- The next two letters signify the bank’s main office in the country.
- The last three letters identify the specific banking branch. (Some codes may exclude these last three letters, e.g., if you bank at the main office.)
Here’s an example to illustrate: CHASUS33TMG.
- CHAS stands for JPMorgan Chase & Co, America’s largest bank.
- US stands for the United States of America.
- 33 identifies JPMorgan’s New York headquarters
- TMG identifies a specific New York branch.
Where Can I Get My SWIFT Code?
You can get it from various sources, including
- Bank statements. You’ll usually find the digits written clearly on your requested bank statement. Check the top or bottom of the statement to verify.
- Official website. Banks usually list all the codes for their respective branches on their official website. This makes it easy for customers to find them.
- Call your institution. You can call your financial institution and ask them about the specific code for your branch. The support staff should be able to provide you with the accurate one.
- Consult the recipient. You can always ask the recipient of your foreign transfer to provide the number.
- Online websites. Many websites offer a SWIFT code finder that you can use to find the numbers for banks in different countries.
Are SWIFT and BIC Codes the Same Thing?
If you’ve heard about SWIFT codes, you’ve likely also heard about BIC codes. Many people get confused and wonder if they’re different things, but they aren’t. They are essentially the same thing.
Technically, SWIFT is the name of the banking communication system, and the Bank Identifier Code (BIC) refers to the digits identifying each institution connected to the system. They’re often used interchangeably.
How Does A SWIFT Transfer Work?
When you initiate a transfer, your banking institution uses the unique digits to contact the recipient’s institution. It instructs the recipient’s institution to credit their account with a specific amount. Once the credit has been confirmed, it deducts the equivalent amount from your bank account.
It works similarly if you’re receiving a transfer. Your banking provider receives instructions from the sender’s provider to credit your account with a specific amount. Once confirmed, it deducts the equivalent amount from the sender’s account.
The fee for a transaction is usually between 3% and 5% of total volume.