What is an IBAN number and how does it work? (2024)

Why IBAN numbers were created

The IBAN system was designed to simplify the transfer of money overseas—but they’re used in some countries for domestic transfers as well. Separate from your account number and sort code, they include information about the account holder’s specific bank, the country that this bank is in, and a combination of other account details. This added level of coded security reduces transaction errors, rejected payments, and transfer delays across borders. IBANs can only be used to send or receive funds, and they can’t be used for other transactions, such as cash withdrawals.

IBAN characters, explained

Each character set of an IBAN number shares a specific piece of information with banks. They begin with a two-letter country code—such as ‘FR’ for France and ‘DE’ for Germany. The next two digits are control checks, acting as a security layer specific to your bank. The remaining numbers are domestic banking details, also known as your Basic Bank Account Numbers (BBAN). The BBAN information will typically include a bank code and branch reference, as well as the account number—although formats can differ across IBAN regions.

How an IBAN number works

When you make a cross-border transaction, the characters that make up your IBAN number are run through the payments system used by your bank. By verifying the numbers and letters against their database, the system is able to confirm the sender’s account and that of the recipient. Special algorithms are used to digest and check the account information. If it’s valid, the payment will be processed.

How to use an IBAN number generator

You can also find out your IBAN using an online IBAN calculator. Because the system is an internationally accepted coding system, the calculator tool is able to generate it for you using the preset configuration set by the system and your country; simply enter your country code, sort code, and account number. You can also validate that the number your recipient has provided is active via an IBAN number checker.

How safe is an IBAN?

Using an IBAN number to transfer funds is considered safe by Eurozone finance regulators, and is routinely used to make payments across borders. The key security benefit is that although other consumers can make money transfers into your account using your IBAN, it’s not possible to withdraw money or transfer funds from your account. This means that there is no security risk for your funds.

International money transfers

By reducing international transfer errors, using your IBAN number can help avoid extra fees that may occur when your bank needs to reverse an incorrect payment. It also speeds up transfer times. Transferring funds overseas from your bank account can sometimes be costly and time consuming. Want to learn how to send and receive money internationally the quick and easy way? Check out our tips for the best ways to send money online internationally.

N26 international transactions with SEPA

At N26, all our accounts allow Eurozone transactions through SEPA. By using your IBAN number to transfer money between accounts, SEPA Credit Transfer can process a payment in as little as one working day.In a hurry? If both your account and the recipient’s are SEPA Instant Credit-registered, the transfer will be completed within 10 seconds of confirmation—offering instant international transfers at the click of a button. Learn more about SEPA transfers with N26.Open an N26 account in minutes for quick and secure international payments between accounts, with SEPA Credit Transfer and SEPA Instant Credit Transfer.