ABA routing number definition and meaning
An ABA routing number, also known as a routing transit number (RTN), is a nine-digit code that is used to identify US-based financial institutions such as banks and credit unions. This code allows money to be transferred electronically from one bank account to another, such as checks, electronic payments, and wire transfers.
More about ABA routing numbers and their purpose
This series of numbers was first introduced by the American Bankers Association (ABA) in 1910 to make it easier to identify banks issuing paper checks, because they were commonly used to pay vendors and make purchases at the turn of the twentieth century. Today, the ABA still assigns these nine-digit numbers to banks and other financial institutions in the US, and the Federal Reserve Bank uses them to process financial transactions.
ABA numbers are usually listed on the bottom left-hand side of checks and can sometimes be included on other financial documents. They are also used to route transactions like ACH (Automated Clearing House), direct deposit, and bills that need to be paid automatically. Financial institutions that need to carry out these types of transactions must apply for an ABA number through LexisNexis Risk Solutions, the official registrar for these codes.
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