A SWIFT code, a group of letters and numbers used globally to identify a bank account, is similar to a routing number, but they function differently.
Say you want to transfer money from your bank account to someone else’s: You’ll need to know some basic information about the recipient’s financial institution and their account. This ensures safe and accurate electronic transfers of funds. If you’re conducting a domestic transfer (that is, from one bank account in the United States to another), an ABA routing number will be required. If you are moving funds internationally (sending money to another country from the U.S. or vice-versa), a SWIFT code is typically required.
Key Points
• SWIFT codes and routing numbers are both used to transfer money, but they are not the same: SWIFT codes are used for international transfers, while routing numbers are used for domestic ones.
• SWIFT codes are alphanumeric and identify banks globally, while routing numbers are numeric and used within the U.S.
• The Society for Worldwide Interbank Financial Telecommunications, founded in 1973, oversees SWIFT codes
• The American Bankers Association, established in 1910, manages the use of routing numbers in the U.S.
• Incorrect SWIFT codes or routing numbers can cause transaction failures and potential fees, but in some cases may lead to deposits in the wrong account.
Understanding SWIFT Codes
To send money internationally, you’ll usually need a SWIFT code. Learn more about how this string of letters and numbers usually works.
What Is a Swift Code?
The Society for Worldwide Interbank Financial Telecommunications (SWIFT) is a network that allows banks and other financial institutions to electronically communicate with each other securely, across borders. A key part of that involves a SWIFT code, also called a BIC (Business Identifier Code), which identifies a specific bank, with information about the country, location, and, if applicable, branch.
Purpose and Usage of SWIFT Codes
SWIFT codes identify specific details of a bank to ensure international payments are going to the right bank. These codes are comprised of eight to 11 alphanumeric characters:
• The first four characters are letters and represent the name of the bank.
• The next two characters, also letters, indicate the country the bank is located in.
• The next (and sometimes final) two characters can be letters or numbers and indicate where the bank’s main office is located.
• In instances where the bank is large enough to have branches in multiple countries, cities, or regions, there may be a three-digit branch code at the end of the SWIFT code.
If you’re sending an international wire transfer from the United States, you’ll usually need to know the recipient’s SWIFT code. There are a number of countries that do not participate in SWIFT, but generally speaking, SWIFT is the global standard for international payments.
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Understanding Routing Number
To send money domestically in the United States, you’ll usually need a routing number. Here’s important information about what these series of digits are and how they function.
What Is a Routing Number?
A routing number is a nine-digit code composed of numbers that are used to identify banks and credit unions within the United States during domestic transfers.
These codes have been around for more than a century. The American Bankers Association (ABA) started to link routing numbers to financial institutions in 1910 as a unique identifier.
Purpose and Usage of Routing Numbers
Like a SWIFT code, a routing number helps direct money transfers to the right financial institution. You’ll also need the recipient’s bank account number to successfully move the funds.
You might think of the routing number like a street name for your bank account (Main or Church Street, say), but your bank account number is the actual numeric portion of your address (to continue the analogy, this would specifically identify a house), to ensure money goes to the right “home” on that “street.”
(It’s worth noting that Canada also uses routing numbers, but not ABA routing numbers. Instead, Canada’s eight- or nine-digit routing numbers include a three-digit institution number and a five-digit transit number, and possibly a zero.)
ACH transfers and wire transfers require knowing the recipient’s bank account and routing number. And you’ll frequently need to know your own routing number for several common transactions, such as:
• Online bill and tax payments
• Payment app setup
There are some ways to send money to another person in the United States without needing to know their routing number. For instance, you can write and mail a check, you can send a money order, and you can use a peer-to-peer (P2P) transfer app to send money to someone in the U.S. without needing to know their routing number.
Differences Between SWIFT Codes and Routing Numbers
While they serve a similar purpose in electronic funds transfers, there are some key differences when comparing SWIFT codes vs. routing numbers.
Domestic vs. International Transactions
In the U.S., you’ll use routing numbers for domestic transfers. For international transactions, you’ll need to know the recipient’s SWIFT code. U.S. banks typically have a SWIFT code for such situations that is specific to each branch. (Some smaller banks and credit unions may not, however, have SWIFT codes.)
Code Structure and Format
Routing numbers are nine characters, all digits. SWIFT codes are alphanumeric and are typically between eight and 11 characters long.
Issuing Authorities
The Society for Worldwide Interbank Financial Telecommunications oversees SWIFT codes and was founded in 1973. The American Bankers Association manages routing numbers in the U.S. and was established much earlier — in 1910.
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When To Use SWIFT Codes and Routing Numbers
If you are wiring money internationally, you’ll need to know a recipient’s SWIFT code. (There are a number of countries that do not use SWIFT codes, in which case you’ll need to find an alternate way to identify their bank during an electronic transfer or move money using another method.) Similarly, if someone is wiring money from another country to you in the U.S., you’ll need to provide them with your bank’s SWIFT code.
If you’re transferring money to someone else domestically in the United States, you’ll instead need to know their bank’s routing number. You’ll also need your own routing number when transferring funds, as well as setting up direct deposit, online payments, and other forms of digital transfers and payments.
Locating SWIFT Codes and Routing Numbers
You can typically find your SWIFT code on a bank statement or on your bank’s website or app. Call customer service for your bank if you’re unable to locate it.
Your routing number is also easy to find online or via mobile app when you log into your account. The routing number is also printed on your paper checks. Typically, it is the first set of numbers at the lower left corner of a check.
The Takeaway
SWIFT codes and routing numbers serve the same basic purpose of helping to identify banks when transferring money electronically, but they are used for different kinds of transfers. Domestic transfers in the U.S. rely on routing numbers while international transfers typically need SWIFT codes.
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FAQ
Can a SWIFT code be used for domestic transactions?
In the U.S., SWIFT codes are not used for domestic transactions. Instead, you’ll need to know your bank account number and routing number, as well as the bank account and routing number of the person to whom you are wiring money. Or, if someone is transferring funds to you, they will need your identifying information, including your bank account number and routing number.
Are SWIFT codes and routing numbers interchangeable?
When considering SWIFT codes vs. routing numbers, it’s important to recognize that they are not interchangeable. They’re issued by different authorities, have a different number of characters, and are used for different purposes. While similar, routing numbers are for domestic transfers, and SWIFT codes are for international transfers.
What happens if I use the wrong SWIFT code or routing number?
If you use the wrong SWIFT code or routing number for a wire transfer, the transaction will typically fail, and the payment will be returned to you. In some cases, you might have to pay a fee (including if you resubmit the transaction), and it’s possible money could be routed to the wrong account. For this reason, it’s important to verify that you have the correct SWIFT or routing number when transferring funds.
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