Transit routing numbers are used by US banking institutions to identify themselves on paper checks and electronic transactions. They are necessary for online bill payments, direct deposits, and automatic withdrawals. The American Bankers Association issues these numbers, with more than 25,000 in use. Customers can find their transit routing number on their paper checks or by contacting their bank.
Banking institutions in the United States use nine-digit numbers called transit routing numbers. These numbers are used to identify banking institutions on paper checks and in processing electronic transactions. For example, they are often used to initiate and process online bill payments and automatic money transfers. They are also used for direct deposits and automatic withdrawals.
To find their transit routing number, a person can look at their paper check. It usually appears at the bottom of the check, to the left of the checking account number. A person can also contact their bank and ask for their transit routing number if they don’t have a paper check on hand but need the number for a transaction.
The American Bankers Association pioneered the use of the transit routing number in the early 1900s. This organization is still responsible for issuing these numbers today. It is estimated that there are more than 25,000 routing transit numbers in use in the United States. Interestingly, large banks may have more than one routing transit number. For example, a banking institution may have different routing transit numbers for bank accounts and branches in different regions of the country.
From a consumer standpoint, your transit routing number is almost as important as your checking account number. Without it, electronic and check transactions will not be processed. When a person wants to pay by check online or over the phone, he or she must provide this routing transit number. He’ll also need it when he wants to set up a direct deposit to his account or allow a merchant to withdraw an automatic payment from his account. An account holder has to provide this number when he wants to order new checks for his account as well.
Banks use transit routing numbers to complete their customers’ transactions. When a check is used for payment, for example, the recipient of the payment deposits the check into their bank account. The recipient’s bank then presents the check and a request for payment to an intermediary bank. The intermediary bank uses the routing transit number on the check to identify the paying banking institution.
After identifying the appropriate banking institution, the intermediary bank presents the check to the paying bank and requests payment. When the paying bank agrees to clear the check, the intermediary bank debits the paying bank and credits the receiving bank. Finally, the payer’s bank account is debited for the amount of the check.
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