The US doesn't use IBAN at all — American banks identify accounts with a routing number and account number instead, so this format only becomes relevant the moment money needs to move to or from a country that does use it.
What an IBAN is made of
The first two letters are the ISO 3166-1 country code (GB for the United Kingdom, for example), followed by two check digits, and then the BBAN (Basic Bank Account Number) — a country-specific block that encodes the bank code and account number.
What the check digits are for
The two digits right after the country code are a checksum computed with the MOD-97 algorithm: the whole number, with its first four characters moved to the end, is treated as one large integer, and dividing it by 97 must leave a remainder of exactly 1 for a valid IBAN. That catches a typo instantly, with no need to contact a bank.
Where IBAN applies, and where it doesn't
IBAN (ISO 13616) is standard across nearly all of Europe and a number of countries elsewhere, but the US, Canada, and most of East and Southeast Asia never adopted it for domestic banking — those countries route money with their own local account identifiers instead. That makes this tool mostly relevant for international wire transfers into or out of an IBAN country, rather than for everyday domestic banking in the US.
What this is useful for
- Check that an IBAN was typed correctly before submitting an international wire.
- Identify the destination country of an account from the first two letters.
- Spot a typo in a long account number without contacting the bank.
BIC/SWIFT codes and how they relate to an IBAN
The BIC (Bank Identifier Code), also known as a SWIFT code, is a separate bank identifier sometimes required alongside an IBAN for international transfers, even though the two standards are independent of each other. An IBAN already encodes the bank code in its structure (the BBAN), so a BIC is technically redundant for transfers within SEPA — but many payment systems still ask for it separately as an extra check on the routing.