What Is an ABA Routing Number?
Anyone who has a bank account should understand what the ABA Routing Number is and how this number is used.
At the bottom of any printed check are two numbers. The first number is the ABA Routing Number; the second is the individual account number. These numbers are found on personal checks, business checks, traveler’s checks and cashier’s checks.
What Does ABA Stand For?
“ABA” stands for American Bankers Association. The ABA was founded in 1875. In 1911 the ABA instituted the practice of assigning a unique nine digit number to each individual bank doing business in the United States. This unique number is known as the ABA Routing Number or the Routing Transit Number. It is the way that each bank, from Wells Fargo to US Bank to your local credit union, is identified by the ABA, by the Federal Reserve, and by other banks.
The registrar responsible for managing the transit numbers for the ABA is Accuity; the firm has performed this function since the system was introduced in 1911. There are about 27,000 distinct ABA numbers in use today. In the event of a merger of multiple banks, the new organization must consolidate their systems to use no more than a single routing number per state within 18 months of the merger or acquisition. When banks go out of business, ABA numbers are retired within a specific timeframe.
What Is the ABA Routing Number Used For?
The
numbering system was originally proposed in 1910 to expedite the sorting of
paper checks and their timely processing and payment by the originating or
issuing bank. Today the ABA is also used to process electronic payments
including wire transfers, direct deposit payments, online bill pay services
and ACH, or automated clearing house, transactions. In addition, the ABA
routing number used to identify the Federal Reserve office responsible for
the issuing bank.
The ABA Routing Number in practice:
- A business or personal checking account is opened at Bank A. A check is issued on that account to a payee.
- The payee will deposit or cash the check at their financial institution, Bank B. Bank B may immediately credit the payee’s account or may wait until the funds are verified, based on Bank B’s policy.
- Bank B will in turn deposit the check with intermediary Bank C.
- Bank C will determine that Bank A is the issuing bank based upon the ABA number imprinted on the check. Bank C will contact Bank A to request payment.
- Bank A will verify funds are available in the individual bank account. Bank A will then remit the funds represented by the check to Bank C. The funds will be deducted from the individual account at Bank A, and the check is said to have ‘cleared’.
In the past, the processing of each check could take days or even weeks, depending upon the location of each bank and the technology of the day. With modern electronic banking practices, the entire process can take place nearly instantly, with online requests for payment taking the place of an actual paper document. In the European Union, several countries have eliminated checks completely and rely completely upon electronic transactions.
Deciphering the ABA Routing Number
The intermediary bank identifies the originating bank by dissecting the ABA routing number imprinted on the paper check or included in the online transaction. Each component of the nine digit ABA number XXXX-YYYY-C represents a specific bit of information:
- XXXX digits are the Federal Reserve routing information.
- YYYY digits represent the ABA institution information.
- C is the ‘check digit’
A great deal of data is gleaned from the first two digits of the ABA number. These indicate the Federal Reserve Bank region where the payment originated, the type of institution issuing the payment, and if the transaction is electronic, as the chart below illustrates:
| Standard | Credit Union | Electronic | Federal Reserve Region |
| 01 | 21 | 61 | Boston |
| 02 | 22 | 62 | New York |
| 03 | 23 | 63 | Philadelphia |
| 04 | 24 | 64 | Cleveland |
| 05 | 25 | 65 | Richmond |
| 06 | 26 | 66 | Atlanta |
| 07 | 27 | 67 | Chicago |
| 08 | 28 | 68 | St. Louis |
| 09 | 29 | 69 | Minneapolis |
| 10 | 30 | 70 | Kansas City |
| 11 | 31 | 71 | Dallas |
| 12 | 32 | 72 | San Francisco |
- 00 is used by United States Government organizations.
- 01 through 12 are standard routing numbers.
- 21 through 32 were originally used only by credit unions and thrifts. Since 1985, these numbers can be used by any type of bank.
- 61 through 72 indicate electronic transactions.
- 80 is used only for traveler's checks.
ABA Routing Numbers and Fraud
The combination of an accurate ABA Routing Number and an individual bank account number will essentially unlock a bank account, so it is prudent to be cautious in providing this information to third parties. This information is commonly required to facilitate direct deposit of payroll, transfers to or from mortgage and brokerage accounts and for online bill payment services. It is wise to take the time to carefully evaluate all requests for ABA routing and bank account numbers, and review all associated bank activity on a regular basis to identify any suspect transactions quickly.
For the business owner, many automated and online tools are available to verify ABA Routing Numbers and bank account balances at the time a check is presented. The time, effort and headaches of collecting on bounced checks can be eliminated by routinely using such services.