A bank transit number, also known as a routing number, is a nine-digit number that helps financial institutions identify what institution issued checks or other documents financial documents. Transit numbers have been around for over 100 years, and they help to keep track of and facilitate transactions between customers at different banks. Most people encounter transit numbers when setting up direct deposit payments or when transferring money between banks for their checking or savings accounts. Show
A bank transit number is commonly referred to as a routing number, or ABA RTN (American Banking Association routing transit number). It is a nine-digit code that identifies a specific financial institution and is used when transferring money or identifying specific bank accounts. The transit number is printed on checks so other banks can determine which bank the check was first drawn from. Every financial institution (including commercial banks, investment banks, , and brokerage firms) has a specific transit number. That number is on all negotiable instruments that issue by the institution. A negotiable instrument is a document that guarantees the payment of an amount of money; examples include a check, a promissory note, or a bill of exchange. The transit number is specific to the bank, not to you. So if you and a friend of yours both opened checking accounts at the same bank branch, then the routing number on both of your checks will likely be the same. The different number to the right is your account number, which is the number that is unique to your individual bank account. How Do I Find My Bank Transit Number? If you have a checkbook, the easiest way to find your bank transit number is to simply look at the bottom left corner of any check. Your transit number should be printed there. If you don’t have any checks, the transit number can still be relatively easy to find. You can find the number by heading to your bank’s website, calling your bank branch or support line, or visiting your branch in person. Big banks like Wells Fargo or Chase typically have a different transit number for each state it has branches in. In addition to having multiple numbers for different states, some banks have different transit numbers for different types of transfers. Some banks assign one number for paper transfers, one for electronic fund transfers (EFTs), and one for wire transfers, because they handle these transactions in different ways. If you’re unsure about which you need, just call your bank and they’ll be able to direct you. Why Do We Need Bank Transit Numbers?The primary function of bank transit numbers has changed over time. When the numbers first arrived in 1911, their purpose was to help banks send the checks they received back to the banks that first issued them. This helped banks to keep track of their transactions – a necessity in the days before computers automated such transaction tracking. Since then, the function of transit numbers has expanded. It now includes both wire transfers and ACH network transactions. Direct deposits, for instance, wouldn’t be possible without transit numbers. The routing number helps to determine what bank the deposit is going to. From there, your individual account number helps specify things further. Bank transit numbers are even more necessary today than they were in 1911. Today there are over 28,000 different financial institutions across the country. Many of them with remarkably similar names, transit numbers play a crucial role in keeping them distinct. Bottom LineBank transit numbers are essential to our banking system. With thousands upon thousands of transactions taking place every day, banks need a way to quickly identify each other. Thanks to those nine numbers, we can enjoy conveniences like direct deposit and online transfers. The next time you need a routing or transit number, you’ll know where to look. Your bank routing number and a unique account number are assigned when you open an account. You can find both of these at the bottom of paper checks or via your online account. These numbers are also needed when you do electronic bank transfers or wires online. Find out how the numbers differ and how to use them. Key Takeaways
Image by Sabrina Jiang © Investopedia 2023 Routing Number vs. Account NumberTo make many financial transactions such as setting up a direct deposit or ordering checks online, you will need both your bank’s routing number and your account number. Account numbers are like customer IDs or fingerprints specific to each accountholder. Routing and account numbers are assigned to indicate precisely where funds in a transaction are coming from and going. Similarly, routing numbers identify each banking institution with a unique numerical ID. Any time you make an electronic funds transfer, for instance, the routing and account numbers must be provided to the relevant financial institutions. Routing numbers are nine digits long, and account numbers are usually between nine to 12 digits, although some may be longer. Routing NumberThe routing number (sometimes referred to as an ABA routing number, short for the American Bankers Association) is a sequence of nine digits used by banks to identify specific financial institutions within the U.S. This number proves that the bank is a federal- or state-chartered institution and maintains an account with the Federal Reserve. ABA routing numbers were once used with paper checks, and ACH routing numbers were associated with electronic transfers and withdrawals on accounts. However, most banks today use one routing number for all transactions. When do I need my routing number? Your account and routing numbers are required for every conceivable banking transaction, whether within the bank where the account is held or between banking institutions. Small banks generally possess just one routing number, while large multinational banks can have several different ones, usually based on the state in which you hold the account. Routing numbers are most commonly required when reordering checks, for payment of consumer bills, to establish a direct deposit (such as a paycheck), or for tax payments. The routing numbers used for domestic and international wire transfers aren't the same as those listed on your checks. However, they can easily be obtained online or by contacting your bank. Account NumberThe account number works in conjunction with the routing number. While the routing number identifies the financial institution's name, the account number—usually between eight and 12 digits—identifies your account. If you hold two accounts at the same bank, the routing numbers will, in most cases, be the same, but your account numbers will be different. Anyone can locate a bank's routing number, but your account number is unique to you, so it is important to guard it, just as you would your Social Security number or PIN code. How To Find Your Routing and Account NumbersYou can find your account and routing numbers at the bottom left side of paper checks issued from your checking account. Alternatively, you can often find the routing number when you log into an online banking portal. Because your financial institution's routing number isn't unique to your account, you may be able to simply find it online. Just make sure the website you use is the one owned by your bank or credit union. If you don't have a check handy and you need to know your routing and account numbers, you can check your bank's website or app. When you get to your account, click on the full account number, and it should show you the routing number. You can also call your bank and ask for the bank's routing number and account number after you verifiy your identity. Routing Number vs. Account Number ExampleAt the bottom of a check, you will see three sets of numbers. The 9-digit routing numbers typically appear as the first group, account numbers are the second group of numbers and check numbers are the third number. Sometimes, however, such as on cashier's checks, those numbers can appear in a different sequence. This series of numbers is embedded with magnetic ink, known as your check’s MICR (Magnetic Ink Character Recognition) line. Pronounced "micker," the magnetic ink enables each bank’s processing equipment to read and process the account information. How Do I Find My Routing Number and Account Number?You can find both sets of numbers in a few places, including on your checks, bank statement, on your mobile banking app, or the bank's website. Routing numbers are usually printed at the left-hand bottom of your check and your checking account number will follow it. Which Comes First, Account Number or Routing Number?The routing number appears first, followed by the account number. This is because a routing number is how a financial institution identifies itself and, coupled with your banking account number, it can be used to find your account. Which Routing Number Do You Use for a Direct Deposit?To receive money from a direct deposit, the person or institution making the deposit will need your bank's routing number, along with your account number, for you to receive the funds. Why Do I Have Two Routing Numbers?While no two banks will have the same routing number, it isn't unusual for large financial institutions to have many routing numbers, which are specific to the state or location where your account is held. What Is an IBAN Number?An IBAN is an international bank account number, a global standard for sending bank payments. It consists of 34 alphanumeric characters that identify the country, bank, branch, and account. North American, Australian, and Asian countries don't use the IBAN for domestic money transfers, and will only do so when sending a payment to a country that has adopted the IBAN. The Bottom LineIf you are ever unsure which number is which between your routing and account numbers, you can contact your banking institution. Always remember to doublecheck both numbers whenever you provide them to another party. This will ensure a seamless transaction that avoids delays or associated bank charges stemming from the funds ending up in an incorrect account. |
