Your bank’s routing number is significant because it is the key to knowing where to send and receive money. In fact, when banks ask for a “voided check,” they are usually looking for this number.
Another reason you need to know your bank’s routing number is that; it will definitely come in handy when you need to sign up for direct deposits, make payroll payments or even when you want to send out wire transfers.
If you do not have the above list, and you want to find your routing number, the easiest way is to find it on one of your personal check. There are lots of numbers on the check. Click here for a demonstration.
If you look at your checkbook, you shall see the areas I have highlighted above in green and pink. You should see some symbols that are a little bit weird, plus one of the numbers is longer than the other. There are also some semicolons at the beginning, middle, and end.
These numbers have been printed in magnetic ink and are in fact a part of the Magnetic Ink Character Recognition – MICR that is used to identify the check. This is what the card reader reads when the check is input through it.
Now, the first 9-digit numbers in pink color represent the ABA routing number – I shall explain this in a short while. The next numbers in green color are your account number, and your check number follows these numbers.
Well, sometimes the order is usually reversed, where the account number comes before the routing number, but when you know how long each should be, it becomes quite easy for you to figure out which one is your routing number.
Another way of finding your bank’s routing number is to visit the website and look for it in the FAQ’s. You will have to know the state where you opened the account since most banks have many ABA numbers depending on the state.
Figure 2 sample Chase Bank Check.
So, what exactly is a routing number?
The routing number is also known as the ABA code – or the American Bankers Association number. It is a nine-digit number that is normally used to identify each US federal or state-chartered bank.
This is an identification system that was started in 1911, and the different numbers are used to send money from the US to other banks in other countries.
You will need to know your bank’s routing number so you can successfully receive and send funds, to set up a direct deposit, or automatic payment.
How does the Routing number work?
Each bank and credit union is usually issued with a nine-digit routing number or a Routing Transit Number (RTN) that makes it easy for the check processing system to work and also enables easy identification of the bank or credit union.
You can imagine a situation where every bank has issued a check that needs clearing, but there is no way to know where the check was drawn and which bank issued it. In fact, it can become even more complicated with banks that have many branches.
Not only does the routing number identify the bank, it also identifies the branch that drew the check.
This number is also used when receiving money from overseas, and it helps in identifying the bank where the money shall be deposited.
The American Bankers Association partners with Acuity to manage the official registry of routing numbers. They usually assign these numbers to the specific bank and also publishes a semi-annual American Bankers Association key to the routing numbers.
This key lists all of the assigned routing numbers.
How does the routing number look?
There is a format. The nine-digits are not just put together, but organized in a specific format. They follow this format;
XXXX – This symbol is for the Federal Reserve, and it represents the 12 Reserve Banks.
C – This refers to the Check digit, and it is usually used as a checksum on the whole number. Understanding this Checksum is quite complicated; I shall just leave it like that.
YYYY – This is the ABA Institution Identifier
The numbers are straightforward.
First two digits:
00 – United States Government
01 – Boston
02 – New York
03 – Philadelphia
04 – Cleveland
05 – Richmond
06 – Atlanta
07 – Chicago
08 – St. Louis
09 – Minneapolis
10 – Kansas City
11 – Dallas
12 – San Francisco
80 – Traveler’s Checks
The difference between the ABA and ACH routing numbers:
ABA, as we have already understood above, is the American Banking Association’s routing number that is assigned to each individual bank and credit union. This number uniquely identifies the institution and makes it easy to clear checks between banks.
It is also important when sending money from one country to another, or from one bank to another.
Now, in addition to the ABA number, there is another number known as the ACH number. This refers to the Automated Clearing House number. Without getting too much into technicalities, ACH numbers are used to move money between accounts and to clear checks.
Each bank branch has its own clearinghouse, and this is extremely important as it helps identify the bank that drew the specific check; otherwise, there could be a whole lot of confusion with checks.
Therefore, the ACH number acts as a transit number, and it is found on your check. All ACH number is a part of the ABA number, but not vice versa.
How can you differentiate ACH and a Wire transfer?
In order to move money from one account to another, account holders will usually use wire transfers and ACH. This sounds quite simple, and you may be wondering, so, what is the difference between the two and why are they different?
These focus on recurring and one-time payments i.e., according to the National Automated Clearinghouse Association. It also processes direct deposits and direct payments. These payments include employer-reimbursed expenses, tax refunds, government benefits, interest payments, and annuity payments.
Direct payments are simply transactions that you would simply make to pay a bill such as rent, debt, utilities, etc. They cover recurring payments as well.
These are generally quicker, and they are usually direct transfers between two financial institutions, e.g., if you need to transfer money from Chase bank to Bank of America. They do not require a clearinghouse or a mediator.
Another difference between the two is that wire transfers are made between international accounts, and they do not take a long time, while ACH can take a couple of days.
How can you protect your routing number and bank account information?
The truth is that the routing number is not really your responsibility to protect, and almost all routing numbers are available to the public. All you need to do is search for the specific bank’s routing number on a search engine.
There are, however, some steps you can take to ensure that the transfers you make go as planned. Here are a few tips;
Ensure that you confirm the routing number:
As mentioned earlier, this is a code that has many numbers on it, and you are likely to make a mistake if you are not careful. Therefore, before initiating a transfer, ensure to double-check that the routing number and account numbers are correct.
You must do what you can to ensure that the funds will be deposited not only in the right account but also in the right institution. An incorrect routing number will make it easy for scammers to access your money.
A two-step authentication check:
You should try and set this up whenever you are doing online banking. The process of verification involves using your original password and one other separate code that the bank will send to you via your email or text. This must be input into the system before you can gain access to your account.
This will also help to protect you against any illicit transfers that have not been done by you.
You should try to regularly change or update your password, especially if you constantly do your banking online. This makes it difficult for fraudsters to break into your account and steal your hard-earned cash.
Signing up for alerts:
Most banks have the option for alerts. They are always more than happy to alert you in case there are any activities carried out in your account through text or even email.
This is a great way of ensuring that you have a hands-on approach to everything that is happening in your account. You shall receive an alert whenever money is deposited, withdrawn or even when a transfer is made.
Avoid phishing scams:
Scammers sometimes act like they are affiliated to your bank so they can withdraw money from your personal account without your knowledge. If you happen to suspect something fishy is going on, contact your bank immediately so they can investigate, and take the necessary measures, such as changing your passwords and even canceling your cards.
Transferring money internationally:
Have you ever done an international money transfer? Well, if you haven’t, I shall guide you, just in case you ever need to;
An international money transfer requires two things; a society worldwide interbank financial telecommunication code, and an international bank account number. These two are used for international money transfers.
SWIFT code – Society for Worldwide Interbank Financial Telecommunication, is a unique number that enables banks to recognize each other during foreign transactions. So, in addition to the routing or transit number, you shall need to know the SWIFT code when doing international transfers.
In addition to all that, you shall be required to have some additional information on the recipient such as their address, their account numbers, and the receiving bank’s SWIFT code and as per the rules, any amount that exceeds $10,000 must be accompanied by documentation that explains the purpose for the transfer.
Chase Bank’s wire transfer numbers:
Chase Bank Wiring Numbers
Domestic Wire Transfer
International Wire Transfer
You may be wondering why you need to know all of this information about routing numbers, SWIFT codes, wire transfers, etc., but I always say that ‘information is power,’ and you never know when you shall need this information.
If you are in the business field, then the chances are that you are already making use of some of these services, and this blog has just enlightened you further on things that you probably did not know.
Banks provide many different services that you are probably unaware of. International money transfers and local wire transfers are just some of the services that help banks make a profit as they charge for these services.