What Is a Bank Identification Code or SWIFT Code?

A bank identification code (BIC) or SWIFT code identifies each specific bank. Transferring money between banks, especially international banks, is a key use for these codes. Other types of messages are also exchanged between banks using these codes, which are provided in either eight- or 11-digit formats.

The First Four Characters in a SWIFT Code

The first four characters in a bank SWIFT code or BIC will always be letters rather than digits or a combination of digits and letters. The first four letters are the bank code and are used to identify the bank. Each bank involved in the transaction typically applies a fee, so the transfer costs can add up for those sending and receiving money. The Society for Worldwide Interbank Financial Telecommunication (SWIFT) assigns the codes, and the organization is housed in La Hulpe, Belgium.

The Characters in the Fifth and Sixth Positions

The characters in the fifth and sixth positions are the ISO 3166-1 alpha-2 country code. ISO stands for International Organization for Standardization, and ISO numbers assigned to both financial and nonfinancial organizations. A shorter way to name these characters in the SWIFT code is to call them the country code. As an example, Australia’s country code letter in a SWIFT code is AU. These two characters will also always be letters and never digits.

The Characters in the Seventh and Eighth Positions

The characters in the seventh and eighth positions in a SWIFT code are the location code. This portion of the SWIFT code will be presented as a combination of a letter and a digit. If the bank is referred to as a passive participant, the eighth position character will be a number one. More than 10,000 banks in 212 countries are work together to complete financial transactions using SWIFT codes, and the SWIFT network replaced the slower, less-secure TELEX system.

The Last Three Characters of an 11-digit SWIFT Code

The last three characters in an 11-digit SWIFT code make up the branch code. If the destination bank is a primary office, then the characters will be XXX. However, most branch codes will feature a mix of letters and digits, according to The Swift Codes. If you’re sending money to an overseas recipient, or if someone overseas is sending you money, you’ll need these codes for the money to reach the right financial institution.

Bank Transfer Terminology

The terms SWIFT code and BIC mean the same thing, so you can correctly use the terms interchangeably. Some other terms you may see when conducting banking transactions internationally include Indian Financial System Code (IFSC), Clearing House Inter-Bank Payment System (CHIPS), Bank Sort Code (BSC) and National Clearing Code (NCC). Some ways to determine the SWIFT code you need is by contacting the bank and asking or looking it up on a bank SWIFT code checker tool or website.