how routing transit numbers are used
routing transit numbers are often used when setting up a wire transfer relationship with one s personal or business bank a wire transfer is an electronic funds payment across a network administered by hundreds of banks worldwide while no physical currency moves among financial institutions during a wire transfer information does pass between banks including the recipient s account information the receiver s bank account number and the amount of the transfer as a result a correct routing transit number is critical to ensure sensitive information is directed to the appropriate receiving party and that the transaction goes through smoothly routing transit numbers are also involved in direct deposits of money from employers paying employees and income tax refunds from the internal revenue service irs a direct deposit allows a sender to deposit funds directly into the receiver s bank account electronically instead of issuing a paper check routing numbers are nine digits long while bank account numbers often vary in length in addition your routing number will always begin with a 0 1 2 or 3 routing number vs other banking numbersthere are a few terms that are synonymous with routing transit number including routing number transit number and aba number aba is an acronym for the american bankers association which established these numbers in 1910 1 the terms routing transit and aba are often used interchangeably routing numbers were originally established for checking accounts but have since evolved to include identifying banks during electronic transactions as well a swift code is a similar identification code used for facilitating banking transactions though swift codes are mainly used for international transfers alternatively an international bank account number iban is a lengthy alphanumeric code that identifies the country check number bank code bank branch code and bank account number of a transaction it is also mainly used for international transactions special considerationsbefore the invention of the internet and the widespread use of computers check fraud was a major issue fraudsters could falsify a routing number on a check and attempt to cash the check at a local bank without the banks being on an interconnected computer system it was difficult to verify checking account routing numbers leading to instances of fraud and theft lexisnexis risk solutions it he official registrar of routing numbers and newly organized financial institutions must apply to have a routing number assigned to them a single financial institution may have multiple routing numbers for different payment methods for example a bank may have a routing number specific for ach transfers paper transactions or wire transfers 