ABA numbers are unique numbers assigned to financial institutions to allow funds transfers between different banks. Although this practice is also prevalent in other countries, the nine-digit format is unique to the United States. ABA numbers are known by several other terms, namely Routing Transit Numbers (RTN), ABA Transit Numbers, and ABA Routing numbers.
ABA routing numbers are used by personal as well as business accounts. Employers will need to know their bank’s ABA number when setting up payroll direct deposit, for example.
Employers can identify their bank’s routing transit number by contacting their bank or looking at the number sequence at the bottom of payroll checks. The sequence of nine digits separated by colons on either side is the ABA transit number of the bank.
The sequence of numbers is printed in special ink to facilitate MICR (Magnetic Ink Character Recognition). The routing number is also printed at the top of the check. If the MICR reading shows inconsistencies, banks can mathematically check the fractional RTN code printed on the upper side of the check.
Some larger banks may have more than one ABA number, depending on the geographical location of the branch. Large federal financial institutions assign different RTNs to different branches. To find the right routing transit number, employers should contact the branch in which they have opened their account. To have a detailed look at electronic check clearing and more, consult the Federal Reserve System for accurate information.
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This article is updated from its original publication date of August 30, 2012.This is not intended as legal advice; for more information, please click here.