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Most bank account holders have heard of a routing number and may have had to locate their bank’s routing number to set up direct deposit or transfer money to another U.S. bank. But those who’ve never had to use their bank’s SWIFT code may not know that it exists.
What is a SWIFT code, and how is it used? Read on to learn about SWIFT codes and their importance in global money transfers.
What Is a SWIFT Code?
The Society for Worldwide Interbank Financial Telecommunication is a network that many banks use to facilitate the transfer of money to banks in different countries. The network itself doesn’t carry out transfers. It merely transmits transfer instructions between banks and sometimes uses intermediary institutions to pass along these transfer instructions.
A SWIFT code is a standard format for a business identifier code. Every bank that belongs to the SWIFT network has one or more SWIFT codes that correlate to the bank’s business identifier code or codes.
The organization that issues SWIFT codes also issues BIC codes. The terms SWIFT and BIC are used interchangeably and are sometimes mentioned together on banking sites since these codes are the same.
When Is a SWIFT Code Needed?
A SWIFT code is needed when someone wants to transfer money internationally. In order to ensure that the money gets to the correct financial institution, the sender provides their bank with the SWIFT code for the receiver’s bank along with the receiver’s name, address and bank account number. The sender’s bank uses the code to identify the receiving bank. It then sends a SWIFT message to the receiving bank, using its own SWIFT or BIC code to identify itself and request the receiving bank to accept the transfer. Once the receiving bank approves the request, the transfer will be completed.
It’s important to note that SWIFT codes or BIC codes are sometimes used in conjunction with International Bank Account Numbers, or IBANs. Whereas a SWIFT code identifies a particular bank or bank branch, an IBAN identifies a particular bank account. If a transfer uses IBANs, it’ll use both the sender’s and the receiver’s to ensure the funds come from the correct account and go into the correct account.
How Does a SWIFT Code Work With International Payments?
Think of the SWIFT network as a messaging system that gives banks a secure way to communicate payment instructions across borders. If the two banks can’t make direct deposits, they’ll use one or more third-party banks to facilitate the transfer, similar to how participants in a relay race pass a baton.
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These third-party banks are called intermediary or correspondent banks, depending on the currencies they use to make the transfers. Intermediary banks transfer funds using their local currency. Correspondent banks can transfer funds using a number of different currencies.
Say you want to send a payment to a family member in another country, and you’ve contacted them for their bank’s SWIFT code as well as their IBAN or account number, identifying information and their currency. You’ll go to your bank to request a transfer of funds from your account to your family member’s account overseas and provide your bank with the recipient’s SWIFT code, account number, name and other identifying information.
Your bank will then transfer the money from your account into its own account, and contact the recipient’s bank with instructions for the transfer. If it can deposit the money directly from its own account into the recipient bank’s account, it will. Otherwise, it will deposit the funds into the account of an intermediary or correspondent bank, which will handle the next leg of the transfer. It might take several intermediary or correspondent banks to complete the transfer.
What Does a SWIFT Code Look Like?
A bank’s SWIFT code is an eight- or 11-digit code with four components:
- Bank code: Four letters that represent an abbreviated version of the financial institution’s name
- Country code: Two letters that indicate the country in which the financial institution is located
- Location code: Two numbers or letters that identify the city of the financial institution’s headquarters
- Branch code (optional): Three characters that identify a financial institution’s branch, as opposed to its headquarters
BIC codes follow the same structure.
Do All US Banks Have a SWIFT Code?
Many U.S. credit unions and small banks do not connect to the SWIFT network and do not have a SWIFT code. Instead, some of these institutions send and receive international transactions, or wire transfers, using other U.S. banks that serve as intermediaries to wire the money or other wire transfer services.
How To Find a Bank’s SWIFT Code
Anyone needing to make an international money transfer via the SWIFT network will need to know the SWIFT code of the recipient’s bank. Those wanting to receive an international transfer need to supply the sender with the SWIFT code for their own bank. Most SWIFT codes can be found in one of the following ways:
- Searching the bank’s website
- Contacting the bank
- Checking a bank statement
- Logging in to the online banking platform or mobile banking app associated with the account
In the U.S., some banks have SWIFT codes for specific branches, while others have one SWIFT code for incoming transfers in U.S. dollars and another SWIFT code for incoming transfers in foreign currency. It is important to use the correct SWIFT code when transferring money.
How To Check a SWIFT Code
If you want to check which bank a SWIFT code belongs to, you can use an online SWIFT code checker to get this information. You can verify this information by using any of the methods for finding a SWIFT code listed above.
How To Check on a Transfer Involving a SWIFT Code
How long it takes for a transfer to clear depends on the country the money is going to, how much you’re sending, how many banks are involved and how quickly they process the transaction. Common reasons for delays include bank holidays, anti-fraud procedures, issues with the instructions and the receiving banks’ capacities to process payment requests. Banks in the recipient’s country, for example, might not have the same capabilities as U.S. banks.
If it’s taking longer than you anticipated, you can ask your bank for an update.
Takeaway
SWIFT codes play an essential role in global money transfers by facilitating the transfer of money between banks in different countries. Those who often send or receive money internationally should know how to find a bank’s SWIFT code.
Anyone looking up the SWIFT code or BIC code for a specific bank should consult a trusted source to ensure they get accurate information. This will help avoid transfer delays or errors.
FAQ
Here are answers to common questions about SWIFT codes.
- How do I find my SWIFT code?
- Most banks publish their SWIFT codes on their website. Those needing a SWIFT code can typically search for the bank name plus the term "SWIFT code" and easily find a bank's SWIFT codes.
- A bank may have multiple SWIFT codes, so it's important to find the correct one.
- What is a SWIFT code used for?
- SWIFT codes are used for transferring messages and routing financial and business transactions globally between businesses and financial institutions on the SWIFT network.
- What is an example of a SWIFT code?
- Here is a Wells Fargo SWIFT code: WFBIUS6WFFX.
- The first four letters, "WFBI," represent the Wells Fargo bank code. The following two letters, "US," denote that it is a Wells Fargo in the U.S. The "6W" represents the location of Wells Fargo's corporate headquarters, and the "FFX" represents a specific Wells Fargo branch.
Daria Uhlig contributed to the reporting for this article.
Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.
- SWIFT. "Business Identifier Code (BIC)."
- Lantern by SoFi. 2023. "Routing Number vs. SWIFT Code: What Are the Differences?"
