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Do you find the terms used in international transactions confusing? You’re not alone. There are numerous codes, such as IBAN, SWIFT codes, BIC codes and so on and understanding them is crucial for international transactions. One of these codes is the SORT code, which plays a vital role in money transfers in the UK. In this article, we will delve into SORT codes to clarify their workings and importance in international transfers.
What Is a SORT Code?
A SORT code is a unique six-digit code system used by banks in the United Kingdom to identify specific banks and branches. Each bank and branch has a unique SORT code to route payments accurately and efficiently within the United Kingdom.
These codes are used for domestic transactions within the UK. They ensure that the funds reach their intended recipients promptly and without errors. SORT codes are commonly used for direct deposit of salaries, payment of bills, and other transactions between banks.
For example, if you want to receive payments from clients or customers in the UK, you’ll need to provide them with your SORT code and account number so they can send funds directly to your account.
As an Indian business owner or freelancer with UK clients? Keep reading to find out how to easily open a UK bank account and get your own SORT code.
How Does a SORT Code Work?
SORT codes consist of six digits, separated into three pairs of numbers. The first two digits represent the bank code, the next two digits represent the branch code, and the last two digits identify the specific account. Each bank and branch in the UK has a unique SORT code assigned to them.
The bank code, or the first two digits of the SORT code, identifies the bank where the account is held. This code is unique to each bank and is assigned by the UK National Westminster Bank (NatWest). The branch code, or the second pair of digits in the SORT code, identifies the specific branch of the bank where the account is located. The bank itself assigns this code.
When a payment is made, the SORT code is used to identify the bank and branch where the recipient’s account is held. The bank then uses the account number to locate the specific account and deposit the funds. This process ensures that payments are accurately routed to the correct bank and branch and reduces the risk of errors or delays in processing.
SORT Codes and International Payments
While SORT codes work great for domestic transactions, they cannot help with international payments. This is where International Bank Account Numbers (IBANs) come in. An IBAN is a unique code that identifies a bank account in a specific country, and it’s crucial for receiving international payments.
In the UK, an IBAN comprises 22 characters, with the middle six digits representing the bank’s SORT code and the last eight digits representing the account number. You’ll need to look at the middle and last sets of numbers to find your client’s SORT code and account number within his IBAN. The first six digits of the IBAN identify the country code and check digits so that you can skip those.
Indian business & freelancers – get your own UK account
Now, let’s talk about receiving payments from the UK. For example, suppose you are a freelancer or a business owner working with clients abroad and must receive payments in foreign currency. You may have several payment methods, such as local bank transfers, SWIFT transfers and wire transfers, but they often come with high fees and unfavourable exchange rates. But is there a way to save some extra bucks on international payments?
The answer is YES. An option that can help you receive international payments with lower fees is by using Winvesta’s virtual multi-currency account.
Winvesta’s global collections accounts are designed to help you reduce transaction costs. With our virtual multi-currency account, you’ll get your own UK account number, US ACH, Euro IBAN, and more. This allows you to receive payments from the UK, the US, and Europe with reduced fees and quick conversion options, making it a streamlined and affordable solution. Winvesta offers global collections accounts for over 30+ currencies from 180 countries, helping minimise transaction costs for cross-border payments. Withdrawals to INR are available in as little as 1 day, with rates starting at just $3 + 0.99%.
Save big on international payments!
Conclusion
SORT codes are crucial for domestic transactions within the UK to be processed accurately and efficiently. While they’re unsuitable for international payments, International Bank Account Numbers (IBANs) can be used to identify a bank account in a specific country, including the UK. For those looking to receive international payments in a foreign currency with reduced fees, Winvesta’s virtual multi-currency account is an excellent option.
Open your Winvesta account today!
