Sending money outside the UK: key words and definitions

When sending money outside the UK you may see some different words that you're not familiar with being used. Here are the definitions of some of the key ones to know.

 

International Bank Account Number (IBAN) - An IBAN helps banks identify an account which can be used for making and receiving international payments. For HSBC customers, this number is found at the top of bank statements near your account number.

 

Bank Identifier Code (BIC)/SWIFT Code - The international equivalent of a sort code, this is a unique identifying code of a bank. If you want to make an international transfer, you need to know the BIC of the individual’s bank the money is being sent to. BICs are also known as SWIFT codes. For HSBC customers, this number is found at the top of bank statements near your account number.

 

Foreign exchange rate - Usually just called the exchange rate, this is the rate applied when you convert from one currency to another. Exchange rates move up and down over time and can vary depending on which bank or company you use to make the exchange.

 

Live rate - A live rate is a currency exchange rate that's updated in real time.

 

Recurring payment - A recurring payment is when you set up instructions and authorise a series of payments to be taken from your account. These payments can be for regular or irregular amounts and at different times. Recurring payments work in a similar way to standing orders within the UK.

 

Future dated payments - Future dated payments are when you set up instructions and authorise a payment to be taken from your account on a later date.

 

EEA countries - These are countries in the European Union (EU) and European Economic Area (EEA). They also include Switzerland.

 

Currency accounts - Currency accounts allow you to hold and manage your foreign currency in one place. This account is separate from your current account. Like UK current accounts, they allow you to transfer money to other accounts in currency, set up recurring and future payments and manage your account online.

 

The benefit of a currency account is when you want to make a payment in a currency - for example, if you hold a Euro account and need to make a payment for accommodation/education fees in Euros - you can make the payment without any exchange rates involved.