Bank codes are identification codes used as electronic addresses for financial institutions. They vary in length and name between countries, with the US using a nine-digit routing transit number (RTN) and Canada using an eight-digit bank transit number (BTN). International bank code systems, such as the Bank Identification Code (BIC) and International Bank Account Number (IBAN), have been established to allow money transfers between banks in different countries. In some countries, bank codes and account numbers must be printed on checks with magnetic ink and a magnetic ink character recognition (MICR) font.
A bank code is an identification code made up of alphabetic or numeric characters that serves as an electronic address for a financial institution. The names and wording of the codes may vary between countries. These codes allow you to transfer money electronically from one institution to another.
In the United States, a bank code is a nine-digit number known as a routing transit number (RTN). The RTN is placed between the colon (:) marks at the bottom left of a blank check. The number that follows the RTN is the individual account number.
In Canada, banks use an eight-digit bank code called a Bank Transit Number (BTN). Other countries refer to a bank code as a sort code. The number of characters used by different countries varies, from just four digits in Denmark to ten digits in Spain. However, in all cases, the code serves to identify the country and location of the institution where the funds are held.
International bank code systems have been established to allow money transfers between banks in different countries. One of these is called a Bank Identification Code (BIC). The BIC is an eight-letter designation that identifies the bank, country and city, and is assigned by the Society for Worldwide Interbank Financial Telecommunication (SWIFT). Although the US has its own encryption system, banks located there also have a SWIFT code that allows them to complete international money transfers.
The European Union’s Banking Standards Committee has passed rules requiring that, starting in 2004, all financial institutions in member countries be assigned an additional bank code, called an International Bank Account Number (IBAN). The IBAN is an alphanumeric designation and can contain a maximum of 34 characters. These are governed by ISO 13616, a regulation issued by the International Organization for Standardization (ISO). The first two letters of the IBAN are the BIC country code, followed by a two-digit control key, the bank classification code, and an account number.
In the United States, Canada, and many other countries, the bank code and account numbers must be printed on checks with magnetic ink and a magnetic ink character recognition (MICR) font. This type of printing allows checks to be read electronically. In some regions, banks may face fines and other penalties for not using the proper ink and font on checks.
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