During the money transfer process from one account to another, banks and other financial institutions ask for the bank routing number. The role played by bank routing numbers in check-based transactions is very vital.
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What is a routing number?
A routing number of a bank is the identity of that particular bank account’s location, or in other words, it gives an idea regarding the branch of the bank where the account exists. A bank routing number gives a clear idea regarding the to and fro movement of money. It helps in the progression of each bank-based, account-based transaction. A routing number resolves the confusion between particular accounts and banks and makes all the transactions clear. Both bank account numbers and routing numbers play a significant role in helping banks and other financial institutions in direct deposits, checks, all sorts of auto payments, and wire transfers.
Account number and Routing number
There is a clear differentiation between a routing number and an account number. A specific account gets identified by the account number. And it changes from customer to customer and according to the type of account. A routing number identifies the bank that’s responsible for money going in and out of your account.
History of Bank Routing Number
Back In 1910, the routing number develops by the American Bankers Association ( ABA). The concept originated to nullify the confusion that arose during the time of the transaction. As there are several banks in the United States, and these banks have numerous branches all across, They started giving a unique number for one financial institution. There are also chances that a single bank may have different routing numbers according to the location.
How can we find out the routing number?
One easy way to identify the bank routing number is to get the check. On the bottom side, along with the accounting number and bank routing number will be there. It consists of nine digits and three components. The split-up is in a way that the first four digits represent the Federal Reserve Routing Symbol, whereas the next four digits give an idea regarding the ABA institution. The final component of the ninth number is the check digit. Even though the last part is a single digit, it is an essential element as it helps identify the routing number authenticity.
Another easy way to get the routing number is to just log in to the online banking sites to give a candid idea regarding the routing number. Routing numbers can also collect by making a call to the bank’s branch. Last but not least, almost all bank websites will have the bank routing numbers on them for easy reference.
To summarize, a Bank Routing Number, also known as RTN, is a nine-digit number that is vital in understanding the bank branch and location. In the case of Automatic Clearing House payments ( ACH payments ) and wire transfers, bank routing number plays a significant role. Even though most of the banks will have a single routing number, there are chances that some banks will have more than one routing number based on their location. Hence it can be said that before initiating any money transfers, there should be a good idea regarding the Bank Routing number.