Ever wonder how your money travels across borders seamlessly? Behind every international money transfer lies a sophisticated network that ensures its safety and security.
SWIFT, the Society for Worldwide Interbank Financial Telecommunications, is an expansive messaging network that is the backbone of most banks and financial institutions, facilitating the swift and secure exchange of money transfers globally.
In this blog, we will learn about the SWIFT code, why you need it to make a transfer from Canada to India, the associated fees, and how to minimise them.
What Is a SWIFT Code?
A SWIFT code, also known as a SWIFT/BIC code, is a unique identification code used to identify banks and financial institutions globally. It ensures that funds are directed accurately to the recipient’s bank, no matter where they are located in the world.
The term Business Identifier Code (BIC) is interchangeable with SWIFT code and serves the same purpose.
A SWIFT/BIC code consists of 8-11 characters and is structured as follows:
- Bank Code (4 letters): Represents the bank and is usually an abbreviated form of the bank's name.
- Country Code (2 letters): Indicates the country where the bank is located.
- Location Code (2 letters or numbers): Specifies the location of the bank’s main office.
- Branch Code (3 digits): Identifies a specific branch of the bank.
Why do you Need a SWIFT Code for International Transfers From Canada to India?
When sending money from Canada to India, a SWIFT code is essential for the following reasons:
- Identification: It identifies the recipient’s bank, ensuring the funds are sent to the correct institution in India.
- Routing: SWIFT codes enable banks to route payments securely through the SWIFT network, guaranteeing safe and efficient transfer of funds to India.
- International Standards: SWIFT codes adhere to international banking standards, making them universally recognised and accepted for cross-border transactions.
What are the Fees Associated with SWIFT Transfers From Canada to India?
While SWIFT transfers are reliable, they often come with fees that can vary based on factors such as:
- Outgoing Wire Transfer Fee: This fee is charged by the sender’s bank in Canada for initiating the SWIFT payment to India. The amount varies based on factors such as the transfer amount and the bank’s policies.
- Incoming Payment Fee: After arrival in India, the recipient’s bank may levy an incoming payment fee to process the funds received via SWIFT. The fee amount can differ depending on the received amount and the bank’s fee structure.
- Foreign Exchange Fee: If the currency sent from Canada (CAD) needs to be converted into Indian Rupees (INR), a foreign exchange fee will apply. This fee is influenced by the exchange rate applied and the bank’s foreign exchange policies.
- SWIFT Tracing Fee: In cases where tracking or investigating a delayed or missing payment is necessary, either bank involved in the transfer might charge a SWIFT tracing fee.
How to Minimise SWIFT Fees while Transferring Funds From Canada to India?
The following strategies can help you minimise SWIFT fees when transferring funds from Canada to India:
- Opt for online transfers whenever possible. They typically have lower fees compared to in-person transactions, and some banks may waive the upfront transfer fee altogether.
- Explore services like Vance that offer competitive exchange rates and transparent transfer fee structures between Canada and India.
- Utilise digital accounts that support multiple currencies. This allows you to hold funds in Canadian Dollars (CAD) and Indian Rupees (INR), reducing the need for currency conversion and associated fees.
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Conclusion
SWIFT code is a unique identifier, an 8-11 character long, standard format code that identifies banks and financial institutions worldwide. It ensures your fund is directed accurately and securely to the recipient bank.
Despite its reliability, the SWIFT code comes with high fees that can significantly reduce the amount of money received in India.
FAQs
Q1. Why is a SWIFT code necessary for sending money from Canada to India?
A SWIFT code is necessary for sending money from Canada to India because it is a unique identification code for banks and financial institutions worldwide. It ensures that funds are accurately directed to the recipient's bank in India.
Q2. How can I find the SWIFT code for the recipient's bank in India?
To find the SWIFT code for the recipient's bank in India, check the bank's official website. You can directly contact the bank via customer service or visit a branch in person. Online SWIFT/BIC code directories and tools like SWIFT.com or Wise's SWIFT/BIC finder also provide searchable databases for locating SWIFT codes.
Q3. Are SWIFT codes the same for all branches of a bank?
No, SWIFT codes are not the same for all bank branches. Each branch has its own unique SWIFT code. The SWIFT code consists of a specific part that identifies the bank, country, location, and branch. While the first eight characters (Bank Code + Country Code + Location Code) may be the same for all bank branches, the last three characters (Branch Code) differentiate between branches.
Q4. Can I send money from Canada to India without a SWIFT code?
Yes, you can send money from Canada to India without a SWIFT code if you use online transfer services like Vance, Wise, Remitly, etc.
Q5. What information is included in a SWIFT code?
A SWIFT code, or SWIFT/BIC code, comprises 8-11 alphanumeric characters that uniquely identify banks and financial institutions worldwide. It includes a bank Code (4 letters), a country code (2 letters), a location code (2 letters or digits) and a branch code (3 digits)
Rupali enjoys writing about everything related to money (in India and around the world). A MICA graduate in Communications, she has over seven years of experience in content creation and communication strategy for various user touchpoints, from CRM to UX for apps and websites, especially in fintech and healthcare. Outside of work, you'll find her binging on true crime documentaries or cooking up a storm.
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