Swift code and IFSC code are the terms used in the context of banking, these terms are used while transferring funds from one bank account to another bank account. The majority of people gets confused with both the terms and that is the reason why it is important to know the difference between IFSC code and Swift code –
Swift Code VS IFSC Code
Full Form
The full form of the SWIFT code is Society for Worldwide Interbank Financial Telecommunications while the full form of the IFSC code is the Indian Financial System Code.
Meaning
Swift code is used in the context of international transfer of funds where a person can send money from domestic bank to overseas bank by giving the SWIFT code of overseas bank branch to domestic bank branch while IFSC code is used in the context of the transfer of funds within the country where a person can send money from one bank account to another bank account within a country.
Number of Characters
Swift code can be of 8 characters or 11 characters where the first 4 letters are bank codes which are usually the first 4 letters of the bank while the next 2 characters indicate the country to which the bank belongs and the next 2 characters denote the location code of banks main office. It should be noted that the last 3 characters are optional as they are the branch code of the bank in which funds are being transferred. While IFSC code is of 11 characters where the first 4 characters represent the name of the bank while the 5th character will be zero in all the cases and the last 6 digits represent specific branch code, hence all 11 characters are compulsory or needed in IFSC code.
Charges
If an individual is doing international transfers using swift code then charges are quite high but as far as an individual is doing a local transfer using IFSC code then charges are quite nominal. In simple words, it is cheaper to do local transfers of funds as compared to doing international transfers of funds.
Allowed Banks
In the case of swift code only a few bank branches or urban centers and metro cities are allowed to do international transfers of funds using swift code but as far as IFSC code is concerned all bank branches are allowed to do local transfers whether that branch is in a metro city, urban center or in a rural area.
Apex Body
The apex body in the case of Swift code is an international organization for standardization also known as ISO, while the apex body in the case of IFSC code is the Reserve bank of India also known as RBI.
Time for Transfer of Funds
In the case of swift code transfer of funds takes time which can range from 1 day to 7 days while as far as NEFT is concerned transfer of funds takes 2 to 3 hours. In simple words, the IFSC code takes less time as compared to Swift code when it comes to the time taken for the transfer of funds.
As one can see from the above that both Swift Code and IFSC code are completely different from each other while one is used for domestic-related transactions and the other one is used for international transactions and that is the reason why the majority of people will never have to use Swift code as the majority of people do not do an international transfer of funds.