"ABA" stands for the American Bankers Association, the organisation that founded the ABA routing number system in 1910. ABA routing numbers are unique nine-digit codes that financial institutions in the United States use to identify specific banks or credit unions. They're used to process financial transactions, such as direct deposits, electronic funds transfers, electronic transfers and cheque processing, ensuring that these transactions are sent to the correct institution and branch.

This guide will cover what ABA routing numbers are, how these numbers are used and how people in American can locate theirs.

What's in this article?

• How are ABA routing numbers used?
  
• How Americans can find their routing number
  
• Difference between a routing number and an account number
  

How are ABA routing numbers used?

According to the ABA, there are approximately 28,000 active routing numbers in the US. ABA routing numbers are used by banks and other financial institutions in the US to process the following types of financial transactions:

• Direct deposits: Employers, government agencies and other entities in the US use ABA routing numbers to send payments, such as salaries, tax refunds or Social Security benefits, directly to individuals' bank accounts.

• Electronic funds transfers (EFTs): US banks use ABA routing numbers to transfer funds electronically between accounts, for purposes such as automatic bill payments or person-to-person (P2P) transfers.

• Electronic transfers: Banks and credit unions in the US use ABA routing numbers to ensure that funds sent via electronic transfer go to the correct institution.

• Cheques: Financial institutions in the US use ABA routing numbers to process cheques and send them to their correct destination. ABA routing numbers are listed on the bottom of all cheques.

• Automated Clearing House (ACH) transactions: ACH payments – which cover a wide range of electronic transactions, including bank debits and credits, business-to-business (B2B) payments and payroll processing – also require ABA routing numbers.

How to find your routing number

If someone in the US has multiple accounts with a single bank, they might all use the same routing number. But if they have accounts at different banks or different branches, the routing numbers could vary.

Here are a few places where the routing number can be found:

• Cheques: The routing number is a nine-digit string printed on the bottom-left corner of a cheque. It'll be the first set of numbers that can be seen, followed by the account number and the cheque number.

• Bank statements: Many banks also include the routing number on the monthly bank statements that they issue. This may be located in the upper right-hand corner or somewhere within the account information details.

• Bank's online portal or mobile app: Most US banks allow customers to view their routing number directly through their online banking platform or mobile app. To do this, they need to look for a section on account details or routing numbers.

If the routing number can't be found through the methods mentioned above, customers can always contact their bank directly. A customer service representative can provide you with your routing number over the phone or through a secure online chat.

Difference between a routing number and an account number

Routing number

An ABA routing number identifies a specific financial institution or bank branch. It directs financial transactions to the correct bank during processing.

• Structure: A nine-digit code used in the United States.

• Usage: Used for tasks such as direct deposits, electronic transfers, electronic funds transfers and processing cheques.

• Location: Found at the bottom left-hand corner of a cheque or provided by the bank for other transactions.

Account number

A bank account number identifies an individual account within a financial institution. It's unique to each account within a bank or credit union.

• Structure: Varies in length and format but is usually longer than a routing number.

• Usage: Directs funds to a specific account during a transaction. It's needed for direct deposits, electronic funds transfers, electronic transfers and other banking operations.

• Location: Found on cheques, bank statements and other bank-related documents. On a cheque, it's located between the routing number and the cheque number, and is often separated from the routing number by a space or a symbol.