December 2022
Every time you perform a financial transaction that involves your checking or savings account, you must provide a routing number and an account number. Both of these are mandatory in order for the operation to occur. To help you understand how these transactions work, here’s an explanation of what a routing number is and how it’s used.
What is a routing number?
Every bank or credit union has a specific, nationally recognized nine-digit number that identifies it among other numerous financial institutions. This identification code is unique to every organization. That way, there’s no confusion over similar names that could easily be mixed up and lead to widespread transaction errors.
Some situations in which you’d need to provide the routing number are:
- Paying a bill online using funds from your savings account
- Establishing a direct deposit into your checking account for your paychecks
- Receiving deposits from your tax returns
For over a century, all financial institutions in the U.S. have been using this system. According to Kenny Zhu of ValuePenguin, the method was created by the American Bankers Association, which is why these numbers are sometimes called ABA routing numbers. With how often transactions were performed via paper checks to route funds from one financial institution to another, this streamlined process helped move money into and out of the right places.
Keep in mind that routing numbers are only used in the U.S. for domestic transactions; international wire transfers do not use the same identification codes.
How is a routing number different from an account number?
You don’t want to get a routing number mixed up with an account number. Even though you often use these simultaneously during financial transactions, these are two distinctly different things. While a routing number identifies the bank, an account number identifies which account at the bank the money should go into or come out of.
Where can you find a routing number?
Routing numbers are typically easy to locate, especially if you have a checking account. Simply look at your paper checkbook. The nine-digit code on the bottom-left corner of every check is the routing number of the bank. The second number, which is to the right of the routing number, is your personal account number.
If you don’t have a checking account, you may be able to find the routing number online. Either go to the bank’s website (Waukesha State Bank’s routing number, which is 075901341, is on the bottom of every page), or you can search the ABA Routing Number database, which has a convenient lookup feature. Just make sure you’re looking at the correct institution and didn’t mix up the name with a different, similar one.
As always, if you have any questions about routing numbers, account numbers, or anything else, just ask. Our friendly bankers are always here to help.