Whenever you fill out a form to send a package to another country, you need the recipient's address to get it delivered there, right? An IBAN is similar, but for your money going to another country!

IBAN stands for International Bank Account Number. It's a special code created to easily identify bank accounts in different countries. Think of an IBAN as a more detailed version of a regular address. It starts with a two-letter code for the country (like a country code on a phone number), then has two check digits (like a confirmation code to avoid mistakes), and includes info specific to your bank and account number.

It's important to remember that an IBAN doesn't replace your regular account number. It's like adding extra details to the address to ensure your money reaches the exact location quickly. Let's get into more details about when you would need an IBAN, examples of IBANs, how they are used and the difference between an IBAN, and SWIFT/BIC code.

Read also: How to Transfer Money to A Foreign Bank Account.

When Would  You Ever Need An IBAN?

If you are reading this, chances are you already encountered a situation requesting an IBAN number. An IBAN number is needed in two major situations:

• Receiving money from abroad: Suppose you're a freelancer and just landed a project with a client overseas. For them to pay you, they'll need your IBAN along with your name and bank details. This ensures the money goes straight into your account, just like having the correct address ensures a package gets delivered to your doorstep.
• Sending money to a friend or family member living in another country: Just like you'd need their address to send a letter, you'll need their IBAN to send money through your bank. Providing the recipient's IBAN guarantees the funds reach the right bank account.

Read also: How Long Do International Bank Transfers Take?

Understanding the IBAN Characters

An IBAN is like a puzzle with different sections that fit together to reveal your account details. It can contain up to 34 characters, combining letters and numbers. Here's a breakdown:

• Country Code (2 Letters): This identifies the country your bank is in. For example, "GB" for the United Kingdom, "US" for the United States, or "DE" for Germany.
• Check Digits (2 Numbers): These special numbers act like a verification code. They are calculated using the rest of the IBAN to ensure the entire code is accurate.
• Basic Bank Account Number (BBAN): This unique part contains details specific to your bank account, like bank identifiers and your account number. The length and format of the BBAN vary depending on your country.
• Let's look at an example IBAN:  GB82 WEST 1234 5678 9012 34

Country Code: GB (United Kingdom)

Check Digits: 82 (These verify the accuracy of the entire code)

Basic Bank Account Number (BBAN): WEST 1234 5678 9012 34 (This part is specific to the bank and account in the UK)

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How to Find Your IBAN 

1. Check Your Bank Statement: Often, banks include your IBAN alongside your regular account number. Look for sections labelled 'IBAN,' 'Account Number with IBAN,' or 'International Bank Account Number.'
2. Online Banking Portal: Many banks display your IBAN within your online account details. Log in to your online banking platform and navigate to your account information section. You might find your IBAN listed under 'Account Details,' 'Account Settings,' or a similar category.
3. Contact Your Bank: Simply contact them through phone or online chat, and they can easily get your IBAN for you.

What is the Difference Between an IBAN and a SWIFT/BIC Code

Let's keep it simple – While IBAN identifies your account, SWIFT/BIC identifies the bank itself. When you provide your IBAN to someone sending you money internationally, it ensures it gets to the exact destination. On the other hand, in an international transfer, the recipient's bank uses the SWIFT/BIC code to locate the correct bank to receive the funds.

For more information on the SWIFT/BIC Code, this post what it means in international payment.

Wrapping Up.

Using your IBAN can significantly reduce errors in international transfers, helping you avoid the extra fees associated with reversing incorrect payments. It also speeds up the transfer process, making sending money overseas from your bank account less costly and time-consuming.

If you’d like to send money anywhere in the world and prefer fast transfers at great rates, we recommend the OhentPay money transfer service. Create an account to get started here.

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