Before we discuss the ABA number, let’s first talk about ABA and where it comes from. ABA stands for American Bankers’ Association, a trade association founded in 1875 to represent the interests of various players in the US Banking industry.
So how does the ABA number come into all this? Stick with us as we explain what an ABA number is, what makes it similar or different from a routing number, where you can find it and how it works.
There are many cases in which you might find yourself trying to get money from point A to B through a bank. Maybe you want a flexible and affordable way to pay out money, such as a check. In this case, there are a bunch of different numbers needed, including the check number, account number, and the routing number.
This is how the ABA number came about. Also known as the ABA routing number, it was created by the ABA in 1910 — initially to identify the endpoints where checks were being processed. However, its utility has evolved as the ABA number is now also used in electronic fund transfers, direct deposit and other Automated Clearing House (ACH) transactions. The ABA number is made up of nine digits¹.
In short, it’s a yes and no. A routing number is a nine-digit code that banks use to identify financial institutions when transacting with them. On the other hand, an ABA is used to identify financial institutions within the US, with additional eligibility conditions.
The ABA number identifies US federal or state chartered financial institutions that can maintain an account at a Federal Reserve Bank².
|💡 Need to send money abroad? Meet Wise, a quick and cheap way of transferring money internationally. No currency conversion fees and mark-ups on the exchange rate, you only pay what’s shown to you on the screen.|
There are a few different ways in which you can find the ABA number you should use:
- If you need the ABA number for an institution where you have a checking account, you can find it in your checkbook. The ABA number will be at the bottom left corner of your checks. However, your ABA number may not always be the routing number in that position on checks. If it isn’t clear to you, make sure you call your bank and confirm³.
- You can also find out your ABA number by visiting your bank’s website and going to the direct deposit or ACH section.
- If you’ve registered for online banking with your bank, you can log into your account and find the ABA number.
- There are also other online platforms such as Wise, where you can find the ABA numbers for a wide range of banks.
It is important to remember that a bank may have different ABA numbers. Your ABA number will most likely rely on the bank location where you opened your account. Some banks also have differing ABA numbers depending on the purpose⁴.
You may find that the ABA number assigned to wire transfers is different from the one used for electronic bill payments, or even direct deposits. If you need clarity on these matters, don’t hesitate to get in touch with a customer service agent from your bank.
An ABA number in a way points financial institutions to where they should find your account. Therefore, it’s no surprise that these numbers may sometimes be called check routing numbers or routing transit numbers (RTNs).
These numbers are usually printed in magnetic ink or at least in magnetic ink character recognition code (MICR) font to make them easier to detect by computers and other specialized machines. The MICR font also enables check deposit by submitting a photo of the check.
Your ABA number is usually accompanied by your account number as the information given to whoever is trying to issue a payment. The rest of the work is commonly handled by the bank, a biller or an employer.
In case a bank closes or is taken up in a merger or acquisition, you might receive new ABA numbers. Sometimes you don’t have to use them right away. You may continue using the old numbers indefinitely, or at least until request for new checks and services.
The ABA number is made up of five parts, each with its own purpose:
|First four digits||These represent the bank’s physical location.|
|Fifth and six digits||These indicate which Federal Reserve Bank the institution’s electronic and wire transfers will go through.|
|Seventh digit||This one represents the Federal Reserve Bank check processing center originally allocated to the bank.|
|Eight digit||This one shows the Federal Reserve district the bank is in.|
|Ninth digit||This represents the checksum, a complex mathematical expression of the first eight digits. The result must equal the checksum or else the transaction will be flagged and redirected to manual processing.|
All-in-all, the ABA number is very helpful when trying to make sure that funds are sent to the right person/establishment and more specifically, the right account. They make it easier for those processing payments to pinpoint the destination in what can sometimes be a confusing web of accounts.
The ABA number also simplifies the movement of money since these movements can be classified according to their purpose/nature. Therefore, where there are variations in rules applied in say direct deposits, electronic bill payments, etc., they can be exercised in a faster and more organized manner.
However, it is crucial to always check multiple sources and confirm with a customer support representative that you are using the right ABA number before issuing a payment.
- ABA - routing number
- Investopedia - routing number vs. account number
- ECSI - what is an ABA number/routing number?
- The Balance - what is an ABA number?
Sources checked on: 07.01.2021
Checks are a way to send and receive money, but how long does it take for a check to clear? ⏱Every bank has slightly different times.
There are cases where you may need to void a check. But what is a voided check? Read on to find out exactly what a voided check is, and how to void one.
If you’re looking for the best place to order checks online, then look no further. This article covers 8 of the best places to order checks, so you can find the
Do you need to find out how to endorse a check? 🧐 Then look no further, this article will cover all you need to endorse a check.
Checks are used to send and receive payments, but how long is a check good for? 🧐 Can you lose money if you forget to cash your check? Find out here!
Finding out how to buy stock can be confusing, luckily, you can find all the information you need here.