What Is an IBAN? Structure and Check Digits | Cash Book
Quick answer
An IBAN, or International Bank Account Number, is a standardised way of writing an account number so it can be read unambiguously across borders. It is defined by ISO 13616 and holds up to 34 characters: a two-letter country code, two check digits, then the basic bank account number, or BBAN, in whatever layout that country uses. The check digits are computed with a mod-97 rule, so a typo is almost always caught before the payment is sent. Passing that check proves the string is well formed. It does not prove the account exists, or who owns it.
An IBAN, short for International Bank Account Number, is a standardised way of writing an account number so that a bank in one country can read an account in another without ambiguity, and it is defined by the ISO 13616 standard and carries up to 34 characters, beginning with a country code and two check digits. Precision is the point. So this entry is precise.
Country code, check digits, then whatever that country does
Every IBAN has three parts. The first two characters are the country code: DE for Germany, FR for France, GB for the United Kingdom, BG for Bulgaria. Then come two check digits, always numeric, always in the range 02 to 98. Everything after that is the BBAN, the basic bank account number, which is the country's own domestic account format packed into a fixed number of characters. That is why the layouts differ so much: one country's BBAN holds a bank code and an account number, another's holds a bank code, a branch code, an account number and a national check character.
Each country registers exactly one length. Norwegian IBANs are 15 characters, German and British ones 22, Maltese ones 31. A length mismatch is the fastest tell.
Divide by ninety-seven
The check digits are the clever part. To test an IBAN you move the first four characters to the end, replace every letter with a number using A equals 10 through Z equals 35, read the result as one very large integer, and divide by 97. A correct IBAN leaves a remainder of exactly 1. The scheme comes from ISO/IEC 7064, and it catches essentially every single-character error and every transposition of two adjacent characters, so type a 7 where you meant a 1 and the sum fails before anything leaves the account. A payment not sent to a stranger.
The IBAN validator runs all three tests, the country code, the registered length and the mod-97 remainder, tells you which one failed, and normalises spaces and lower-case letters first, because banks print IBANs in groups of four and the grouping is not part of the number.
Well formed is not the same as real
The mod-97 test is arithmetic performed on a string of characters. It tells you the string is well formed. It tells you nothing about whether a bank ever issued that number, whether the account is open, or who holds it, and a fraudster can generate a structurally perfect IBAN in about a second.
Regulators have gone after that gap. Regulation (EU) 2024/886, the Instant Payments Regulation, requires payment service providers to offer a Verification of Payee service free of charge for euro credit transfers, so that before you confirm a transfer you are told whether the name you typed matches the account behind the IBAN. The obligation applies to euro-area providers from 9 October 2025, with a later date outside the euro area. You get one of three answers: a match, a close match with the registered name shown, or no match. Then you decide.
The dominant transfer fraud is not technical. It is an invoice that looks exactly like the last one, with a different IBAN on it. When bank details change, phone a number you already had. Not the number in the email.
The payments that never reach a card statement
Transfers you send by IBAN are the payments least likely to be recorded, because nothing about them passes through a card. Rent. A shared bill settled after the fact. A contractor's invoice, a transfer into your own savings. None of it appears on a card statement, and several of them are the largest amounts you will move all month, which is why a month that looks perfectly healthy on card spending can still run out of money in the last week. That is the timing problem the cash flow entry describes.
Two habits fix it. Record the transfer at the moment you authorise it. And record a move between your own accounts as a transfer rather than as spending, so the totals stay honest and both balances stay right.
Logging one in Cash Book
Cash Book never connects to a bank. An IBAN payment does not arrive by itself. The keypad has a Transfer pill next to Expense and Income, and accounts hold one entry for each place money sits, cash, cards, savings, each with its own balance under a single net-worth figure. Move money between two of them and both balances change. The total stays put.
For a rent payment or an invoice, voice logging beats typing: say the amount and what it was, and it is filed with a tag and a date. A screenshot of the confirmation works too. The monthly budget guide covers folding large irregular transfers into the plan instead of letting them ambush a good month, and the subscriptions guide covers the ones that repeat. A BIC is generally not required inside SEPA, since the country code and the BBAN are enough to route the payment; the SEPA entry has the scope.
If a transfer has already gone to the wrong account, phone your bank, not the payee, and ask about the recall process and your rights. Today, not Monday.
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Frequently asked questions
How long is an IBAN?
It varies by country, and ISO 13616 caps it at 34 characters. Norway uses 15, Germany 22, the United Kingdom 22, Malta 31. Each country registers one fixed length, so a German IBAN that is not exactly 22 characters is wrong. Length alone is a useful first check, and the mod-97 calculation is the real one.
What do the check digits do?
They catch typing errors. The first four characters are moved to the end, letters are replaced by numbers, and the resulting long integer is divided by 97. A correct IBAN leaves a remainder of 1. Because of how the arithmetic works, a single mistyped character or two transposed characters will almost always fail, which stops the payment before it leaves.
Does a valid IBAN mean the account exists?
No. The mod-97 test is arithmetic on a string. It confirms the format and that no character was fumbled. It cannot confirm that a bank issued that number, that the account is open, or that it belongs to the person you think. Only the bank holding the account can answer that, which is what payee verification services are for.
What is Verification of Payee?
It is a check of the payee name against the account behind the IBAN, run before you confirm a transfer. Regulation (EU) 2024/886, the Instant Payments Regulation, requires providers to offer it free of charge for euro credit transfers, with the obligation applying to euro-area providers from 9 October 2025 and later for providers outside the euro area.
Do I need an IBAN for a domestic payment?
Inside the Single Euro Payments Area, yes in practice: euro transfers and direct debits are addressed by IBAN. Some countries outside the euro area still accept local formats for domestic payments, such as sort code and account number in the United Kingdom, while requiring an IBAN for incoming international transfers. Your bank shows both where both apply.
Is an IBAN secret?
It is not a password, and it appears on every invoice that asks to be paid by transfer. It is still an identifier worth handling sensibly, because it is the anchor for the most common transfer scam: an invoice intercepted and the IBAN swapped. Confirm changed bank details through a channel you already trust, never through the email carrying the change.
What is the difference between an IBAN and a BIC?
The IBAN identifies the account. The BIC, sometimes called a SWIFT code, identifies the bank. Within SEPA the BIC is generally no longer required, because the country code and the BBAN are enough to route the payment. Outside SEPA many banks still ask for both, along with the payee's address.
What this is based on
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