Routing Number is a 9 digit numeric bank code assigned by the American Bankers Association to all the financial institutions in United States for their unique identification. It is the very first number set printed on the bottom left of the checks. Originally designed to help banks to identify the payers bank for faster and accurate processing of cheque payments, now evolved to designate participants in automated clearing houses to process direct deposits, electronic funds transfer, and on-line banking.
Routing Numbers are used for domestic financial transactions and for international transactions other number codes like IBAN and Swift Codes are used.
Also Read : Difference Between Swift Code And IBAN Code
Routing numbers may differ depending on the location where your account was opened and the type of transaction. Which means if your bank account is in HSBC California and your fathers account is in HSBC New York. then your bank Routing number will be different based on the state in which you opened your account. On the other hand Routing number also varies for the type of transaction you want to make. You may get different routing numbers for different transactions like for paper check, wire transfer or electronic transfer.
Here For Example The Routing Number For New York For:-
- Re Ordering Of Paper Checks:- The Routing Number is 021000322
- Electronic Transactions Like Direct Deposit / Automatic Payment :- The Routing Number is 021000322
- Wire Transfer (Domestic / International [Incoming] ) :- Routing Number is 026009593
There are two kinds of bank routing numbers used in the United states i.e ABA Routing Number and ACH Routing Number. Some of the banks in United States uses the same Routing Number for both ABA and ACH transfer but not all.
ABA Routing Number :- American Bankers association (ABA) is also known as Routing Transit Number (RTN). ABA Routing Number is a 9 digit numeric code used by banks in United States to route the payment of paper and electronic checks (cheques). Basically it helps banks in identifying the payer’s bank i.e the bank from which the check was drawn.
- How To Check Your ABA Routing Number? If you have check of your bank account then you can find your ABA routing number easily. As the ABA routing number is the first set of numbers printed at the bottom of the bank check. but in case you don’t have check then either you can check the same online or contact your bank.
ACH Routing Number :- Electronic Transactions which eliminates the need for a paper check are called as Automated Clearing House (ACH). ACH is also a nine digit numeric code which is being used in United States to make electronic transactions. Unlike ABA, ACH is completely electronic.
Although there is no difference between ABA and ACH routing numbers or we can say these are two names used for the same number, as most of the banks uses same number code for both. But in few banks ACH functions include direct deposits and check conversions from paper to electronic and ABA includes wire transfers.
What Are The Pre Requisites To Send Money/Funds To A US Bank Account?
To send funds directly into a US bank account, you need have the following details of the payee:-
- Bank Routing Number (You can ask your bank)
- Bank Name & Address
- Account Number
- Account Type (Checking Or Saving)
- SWIFT Code
When Do I Need To Know My Bank Routing Number?
- For receiving E-Checks
- Direct Deposit : To get your salary or other monthly incomes directly into your bank account you can provide the details of your bank account and routing number to the payer.
- Wire Transfer : – To get wire transfer, you have to provide the bank account number and routing number to the payer.
- Bill Payments : – To make bill payments directly from your bank account you need to enter your checking account number and routing number.
- Re Ordering Of Checks :- You need to mention your bank routing number while re ordering for checks.
Difference Between Routing Number And Swift Code
- Routing numbers are used for US domestic transactions whereas SWIFT Code are used for international transactions.
- Routing Numbers are nine digit numeric codes whereas SWIFT codes are 8 to 11 digit alphanumeric code
- Routing Numbers are used for multiple purposes like bill pay, direct deposit, wire transfer, paper checks using ACH/ABA etc whereas SWIFT codes are used for international wire transfers only.