The International Bank Account Number (IBAN) is a bank account format used in most European countries, but also in many countries outside Europe. Each IBAN consists of 34 alphanumeric characters, and each character serves to help identify the specific account, and always starts with a country’s two-digit country code. It serves at least three vital functions when an individual makes or receives any kind of international payment between banks.
- An IBAN allows financial institutions to quickly and easily note the country of the financial institution that a payment is being sent to.
- An IBAN is used to pinpoint the exact account number to which the money will be sent within that country. Clearly, if either of these aspects is missing, a successful international transfer of funds becomes an ordeal at best and impossible at worst.
- Finally, an IBAN allows financial institutions a highly effective and easy way to double check the accuracy of an account’s details, to ensure that a successful transfer will be made prior to initiating it.
The United States does not currently use IBANs. Instead, they use ABA routing numbers (for domestic transfers) and SWIFT codes (for international transfers).
How Does an IBAN Differ From a SWIFT Code?
The key difference between an IBAN and a SWIFT code lies in what they’re used to identify. Unlike an IBAN number, a SWIFT code only identifies a bank. An IBAN number shows both the financial institution and a specific account at that financial institution.
What is the benefit of having an IBAN?
As having an IBAN is essential for international transfers, it is crucial for any global citizens. From storing money outside your country, facilitating travels, sending remittances, to financing children’s overseas education, having an IBAN makes living internationally possible. If you are interested in opening an IBAN, here at T8 we offer a platform that allows you to open a European IBAN with ease from anywhere in the world, and you can find out more on our main site www.t8wealth.com.