In order to make an online banking transaction with a family member, business partner, or friend, you may have been asked for your bank’s routing number. With the advent of modern banking and electronic payment platforms, you may need to look up a routing number when making transactions such as EFT, RTGS, Fund transfers through Mobile Banking or internet banking.
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Here, in this simple guide I will help you to understand, what is a routing number and what kinds of banking transactions do you need it for?
What is a routing number?
In 1910, the American Bankers Association (ABA) created these identifiers to make sure the withdrawal and deposit of funds went to the correct bank.
We are using cheques daily for our personal and business transactions. But we’ve hardly notice that a cheque comprises of series of digits. The new cheques contain Magnetic Ink Character Recognition (MICR) line which has been formulated to provide information on Cheque Number (7 digits), Routing Number (9 digits), Account Number (13 digits) and Transaction Code (2 digits). Mostly routing number lies below the branch name and in the MICR line.
Routing Number, an essential component of the MICR line, is newly formulated numeric code for easy identification of bank-branch of a cheque’s origin. In a routing number, the first 3 digits are for bank codes, the next 2 digits for district codes, the next 3 digits are for branch codes, and the last digit is for a unique code unique to each bank or branch.
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How do I find my bank’s routing number?
If you’re performing a financial transaction that calls for a routing number, there are different ways to look it up. These three methods are the easiest:
On cheque book leaves:
You can look up the routing number on your personal cheque issued by bank against your account. It should be a nine-digit number in the bottom left-hand corner lies below the branch name of the cheque.
Call your bank:
Unlike account numbers, routing numbers aren’t confidential or secret. Everyone who has an account at that bank has the same routing number, so your bank should be able to provide this information over the phone or you can go physically.
Look it up online:
Today in the world of digitalization you can search for anything on the internet. You can easily search which bank and branch routing number you looking for or you can visit the respective bank’s official website.
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Routing number vs. account number
It’s important to remember that your checking account number and routing number are not the same thing. Although they’re both featured on the bottom of your checks along with your check number, they serve entirely different purposes.
Simply put, routing numbers help institutions identify your bank, and account numbers help your bank identify your individual checking or savings account.
When and how are routing numbers used?
Routing numbers have a role to play in certain types of transactions, such as electronic transfers and direct deposits, but they aren’t required for debit or credit card transactions. Every bank and bank branches have a unique routing number to ensure customer deposit originate from another bank within and outside the country.
- You need to use routing numbers for electronic funds transfers, automated clearing house transfers, and a variety of mobile banking needs.
- Signing up for digital wallets and connecting them to your checking account
- Sending wire transfers to friends or family abroad
- Signing up for automatic withdrawal to pay bills
- Making payments through mobile banking apps or internet banking platforms.
- Setting up direct deposit for tax returns or stimulus checks
- Online money transfer apps—although, debit cards or credit cards are often all you need to get started
- Transferring money between separate accounts (e.g., savings and checking)
- Setting up direct deposit to prepaid debit or credit cards.
- You may also need to have your routing number handy if you need to order checks or receive a loan payment from a lender.
To ensure your funds reach their destination, please ensure this number is entered accurately when you send money online or set up direct deposit.