Ever wonder how banks can process several million transactions daily – and with virtually zero errors? The bank routing number, which is also called the ABA routing number, plays a massive role in every transaction. These numbers are one of the many cogs that make the banking world tick.
The American Bankers Association introduced ABA routing numbers over a century ago. Originally devised to help identify check processing endpoints, these numbers have evolved to help make online banking and electronic fund transfer convenient.
But what exactly are these numbers? Why are they used? And how do they work? We answer all of these questions in this article.
What is a Bank Routing Number?
Your bank’s routing number is its identification number in the same way that your social security number is your identification number. You might have noticed this number on the bottom left of every check in your checkbook. Below is a sample check from Bank of America.
Source: Bank of America Check
The nine-digit number is not something you need to memorize, just like knowing your social security number is unnecessary.
But this doesn’t negate that the ABA routing number is involved behind the scenes whenever money goes into or out of your bank account.
Every ABA number is split into three parts. The initial four numbers in the sequence represent the Federal Reserve Routing Symbol. If a routing number begins with “00,” the number is for a draft or check from the US Government.
| First Four Digits | Next 4 Digits | Last Digit |
| Federal Reserve Routing Symbol | Bank’s identifier | This is the check digit. It prevents transaction errors |
Banks have routing numbers in the range of 01 to 12. The routing numbers on traveler’s checks begin with 80. The ABA routing numbers with other first two-digit series’ are marked “reserved for future use.” Like all other routing numbers, these numbers are managed by the ABA Routing Number Administrative Board.
The next four digits serve as your bank’s identifier. The ninth and last digit is the “check digit,” which helps prevent transaction errors.
A bank can have more than one ABA number and up to five in total.
Note: Don’t confuse the ABA number with your checking account number, which is next to the routing number. This could delay your transaction.
How Does It Work?
The ABA issues bank routing numbers only to federal or state-chartered banks eligible to maintain an account with the US Federal Reserve Bank. So, you can conclude that any bank with a routing number is legitimate and trusted.
The main function of ABA routing numbers is to help individuals, merchants, and other banks verify that the funds route to or are received from the right bank.
In essence, ABA numbers enable smooth bank transactions, circumventing delays or misunderstandings between buyers and sellers.
Further, ABA numbers facilitate trust in the banking system, with sellers taking comfort in the fact that they will receive their funds from a legitimate bank and buyers knowing their money is at their disposal.
What are ACH Routing Numbers?
Though most banks use a single ABA routing number, some have a different routing number for Automated Clearing House (ACH) transactions. These routing numbers are called ACH routing numbers.
The ACH routing number is a nine-digit electronic routing number used for all electronic transactions and may be the same as the bank’s routing number.
As you might be able to tell, the sample Bank of America check we referenced earlier has both ABA and ACH numbers. The sample JP Morgan check, on the other hand, doesn’t.
The use of ACH routing numbers is why in some banks, the ABA routing number is sometimes specifically called the check routing number.
Why are Bank Routing Numbers Used?
Most people don’t find a regular need to use their bank routing number since knowing and using the number is only necessary for a few transactions.
The circumstances where you will need to use your ABA routing number include the following:
- ACH deposits: When you find employment and sign up for direct deposit of your income, you will need to give your employer the ABA routing number and your bank account number.
- Bank transfers/deposits to retirement accounts: You must supply your ABA number if you want to transfer funds to another bank – even if it’s your account. Your retirement plan provider or investment manager will ask you to use ACH deposits to transfer funds from your bank account monthly.
- Bill payments: Payment apps such as Venmo require your bank account and routing number to process payments relevant to your account. You may need to supply the ABA routing number when you sign up to pay bills online.
- IRS direct deposits: You can sign up for a direct deposit of the tax refund (if you are eligible) with your ACH routing number. Your bank account details will also be necessary.
- Wire transfers: A wire transfer is when you send or receive a large sum of money electronically. International transactions are typically done by wire transfer. Every bank has a fee associated with this type of transaction.
How to Find Your Bank Routing Number Without a Check
The ABA number is always on the bottom-left corner of any check. But you might need the number when you don’t have your checkbook. You might not be using paper checks in the first place.
Thankfully, there are other ways to find your bank’s routing number.
You can take a look at your bank statement. You may likely have it in your email inbox of the bank statement. Depending on the bank, they supply the ABA routing number along with your account information in these statements.
If you have your bank’s app on your phone, you can try finding the ABA routing number on the app. But bear in mind that some banks have more than one routing number and that large national banks have different numbers for different states.
If these two approaches don’t work, you can call your bank and get the routing number from the staff.
What Happens When You Enter the Wrong Routing Number
Transactions are only approved when the receiver’s name, account number, and routing number match.
So, in most cases, entering the wrong routing number for a transaction results in the payment being rejected. The bank will return the money to your account in a few days, but the fees will likely not be returned.
The chances of your money ending up in the wrong account are slim to none, but it is still a possibility. Connect with your bank’s customer support team, as only they can advise you about your specific situation.
Conclusion
You might not think about your bank’s routing number daily, but it plays a massive role in everyday transactions.
Besides helping banks identify each other and avoiding misunderstandings and delays, ABA routing numbers help build trust in the banking system.
Now that you’ve read through this post, you will be able to quickly find your bank’s routing number the next time you need it.