What is IFSC Code?

The table below highlights the format of the bank's IFSC code.

1. The first four characters (BARD) represent the identification number of the bank.
2. The fifth character, which is always '0,' is common for all banks operating in India.
3. The last 6 digits (123456) represent the branch code for the bank. Each bank branch has its unique number.

Key Features of IFSC Code

Some key features of the bank's IFSC code are as follows:

1. It helps in identifying a specific branch of the bank. For instance, the IFSC code for Axis Bank, Green Park, Delhi is UTIB0000015.
2. It eliminates the chances for errors in the fund transfer process.
3. It is used in all types of fund transfer methods such as RTGS, NEFT, and IMPS.

How Does an IFSC Code Work?

The IFSC code is an alpha-numeric code that helps in the electronic transfer of funds. IFSC stands for "Indian Financial System Code." It plays an important role in two fund transfer methods, RTGS (Real Time Gross Settlement System) and NEFT (National Electronic Fund Transfer).

At the time of fund transfer through NEFT or RTGS, you have to provide your account number and branch-specific IFSC code. Once you provide these details, the money gets transferred to the account holder. Furthermore, the IFSC code is also used to buy insurance plans and mutual funds via net banking.

The Reserve Bank of India's National Clearing Cell observes all transactions and keeps track of them. Therefore, the chances for errors are eliminated with the IFSC code. You can find the IFSC number on your chequebook or bank passbook.

Different Online Money Transfer Methods Using Bank Account IFSC Code

The IFSC code is used in three electronic fund transfer processes, such as NEFT, RTGS, and IMPS. These fund transfer methods help the customer easily transfer funds from one bank account to another. The details for each fund transfer process are outlined in the section below.

1. NEFT: The NEFT stands for National Electronic Fund Transfer and is one of the popular money transfer systems in India. It helps in the transfer of funds from one bank to another bank account. When initiating the process, you may have to provide IFSC codes for safe and smooth transactions.
2. RTGS: The full form for RTGS is Real Time Gross Settlement, where real-time means transactions happening instantly and gross refers to the no extra charges are applicable. In simple terms, the RTGS process helps in the quick transfer of funds from one bank to another without any waiting period. Similar to NEFT, you must have to provide an IFSC code for a smooth transfer of funds. In addition to the IFSC code, you may have to submit the details such as the name of the payee, an account number, and the transaction amount.
3. IMPS: IMPS is another online fund transfer system that stands for Immediate Payment Service. This service was established in November 2010. With IMPS, you can transfer money instantly and across all renowned Indian banks. IMPS is one of the safest, fastest, and most economical fund transfer services and does not place any restrictions on the transfer amount.