Did you ever notice the 9 digit number on the bottom left-hand corner of your checks? Many people are curious about it. Researches say almost 50,000 people search for routing number related terms in search engines every month.
The ‘routing number‘ is synonymous to ‘transit number’ and ‘aba number.’ It always comprises of a 9 digit code and is used in the United States of America. The main objective of this number is to determine the bank or financial institution from which the money referred to on the check needs to be withdrawn.
We are surrounded with numerous banks today and as such this number comes very handy to our bank in determining the deposit of the check and where exactly the money should be withdrawn from. Gone are the days when people used to face difficulty in determining where checks were written from. Historically speaking, this difficulty came as a great advantage to the criminals in committing fraud against banks.
Therefore, this numerical system was developed to streamline and clarify the process for clearing houses and for banks. This has helped in the honest transfer of money between banks on behalf of their customers for years now.
As a result, banks came up with this numerical system to streamline and clarify the process for clearing houses and for banks. This has been serving great help in money transfer between banks on behalf of their customers since its initation.
This system has now been modernized. The serialized number made it easier for computers to understand and use the supplied information. Since 2004 it is being used to transfer electronic checks also known as echecks or EFTs (electronic funds transfer). The Check 21 act made way to its implementation. It helped a lot in reducing the use of paper checks by making it permissible to make digital copies of checks.
This number system finds its root in 1910 when the American Bankers Association (ABA) devised it to help interbank relations. And since then it is in use to help the banking industry run without disruptions.
It is impossible to keep track of over 26 thousand different banks that issues checks. Being a banker you probably will be confused while trying to figure out where to get your money from. ABA has successfully solved this problem for you right in 1910.
Today there are about 26,895 routing numbers being used in the whole of the United States of America. The number is huge because every financial institution must possess one by law. This means that each and every bank will need to have an ABA number issued to them before its grand opening.
The check routing number is yet another important development in the history of banking. It has come a long way in improving the efficiency of banks. It has helped in improving the security of banks too. It has also helped in improving the way we transfer money over the internet.