Wire transfers, direct deposits, and bill payments all require your account number and routing number. Routing numbers were designed to make electronic banking easier, and that is exactly the function that they serve.
This post will teach you everything you need to know about routing numbers, including what they are, what purpose they serve, and where to find them. So, let's get started.
What is a routing number?
Banks and financial institutions in Canada identify themselves using an eight-digit number known as a routing number. It is a combination of a five-digit Transit ID and a three-digit Institution ID; however, financial institutions in the United States use a nine-digit routing number.
Routing numbers go by many names. Some of these include:
- checking routing number
- routing transit number
- ABA routing number
- Fedwire number
A routing number is used by banks for processing check and electronic transactions such as direct deposits, fund transfers, bill payments, and digital checks.
What is a routing number used for?
Your routing information is required in each of the following scenarios:
You want to sign up for a digital wallet: You might not require the routing number if you are setting up an online account with your bank. However, it is something you will need when signing up for digital wallets that are connected to your bank account.
You want to make an electronic funds transfer: An electronic funds transfer (EFT) is the transfer of money from one bank account to another. To make an EFT payment, you will need your routing number as well as the account number. You will also need the recipient's bank information, including their account number and routing number.
You want to set up a direct deposit with your employer: Enrolling in direct deposit at work ensures your paychecks are deposited directly into your bank account. Setting up a direct deposit is simple, but requires your bank information including: your routing number, mailing address, account number, and account type.
You want to set up a direct deposit with the CRA: Setting up a direct deposit with the Canada Revenue Agency (CRA) can help you get tax refunds faster. You will need your bank routing number to sign up for direct deposit with the CRA.
You want to receive an electronic funds transfer: If you want to receive an EFT payment, you will need to provide your bank details, including your account number and routing number, to the payor.
You want to use online money transfer apps: Online money transfer apps make it easier for you to quickly send money to friends, family, and small businesses anywhere in the world. When signing up for such an app, you might be asked to provide your bank’s routing number.
You want to make automatic bill payments: You will need both your account number and routing number if you are making automatic bill payments.
You want to make a payment online or by phone: You might need your bank’s routing number, along with the account number, while making payments online or by phone.
How to find a routing number?
Your routing number is usually found at the bottom of a paper bank check. However, if you do not use checks or do not have your checkbook nearby, there are other ways to locate the routing number.
Let’s look at all the places where you can locate the routing number.
- Paper bank check
This is the easiest way to find your routing number. Your personal checks have the routing number listed on the bottom in a special font. As mentioned earlier, this is an eight-digit number, comprising of a five-digit transit ID and a three-digit Institution ID.
Your bank account number is also listed on the bottom of the check, but differentiating it from the routing number is easy. The bank account number is seven digits long, while the routing number is of eight digits. Be careful while copying your routing number because a mistake can delay your deposit or payment.
- Bank statement
What if you do not have your checkbook handy? Do not worry, check your latest bank statement instead. Many banks list the routing number along with other account information on the statements they send every month via mail or email.
- Bank website
Many Canadian banks list their routing numbers on their websites. Keep in mind that larger financial institutions frequently have multiple routing numbers, depending on where your account is held or the type of transaction being performed.
So, make sure you get the routing number that is for the location where you have a bank account. Also, ensure the routing number you are using is right for the type of transaction you are making.
- Your bank’s app
Your bank’s app might list its routing number online. Launch your bank’s app and sign into your account. Next, go to “account summary” or “account information”. You should be able to find the routing number in this section.
- Online research
A simple Google search can help you find your bank’s routing number. Simply type your bank’s name followed by the phrase “routing number” in Google and hit Enter.
- Call your bank
You can call your bank and ask a representative for the routing number or to confirm if the number you have found online is correct.
- Free online lookup tools
Some websites offer a free routing number lookup tool. If everything else fails, there is no harm in giving such tools a try.
Where is the routing number on a check?
Canadian banks use an eight-digit routing number. It comprises of:
- The transit number or ID – This is a five digit number, representing the location where you have your account. It is also called the branch number.
- The institution number or ID – This is a three-digit number that represents your bank.
The routing number is listed at the bottom of the check. The transit number is listed first, followed by the institution number.
Will a routing number change?
Routing numbers can change for a variety of reasons. Banks frequently change their routing numbers when they restructure their operations. Other common reasons for your financial institution changing its routing number include:
- When it incurs an acquisition, consolidation, or merger
- When it changes the purpose of the routing number
- When it closes its branches
So, what should you do if your bank changes its routing number?
Your bank will notify you of the change well in advance. If you have any services linked to the account or have set up direct deposits with your employer, make sure to update them with the new routing number.
- Follow your bank’s instructions
Your bank will inform you why they have changed the routing number, as well as what you need to do to update it. You should start using the new routing number as soon as possible. If you are unable to update it right away, the old number will likely continue to function for some time after the change. Since your old number is still linked to your bank account, you can use your old personal checks with confidence, unless your bank tells you otherwise.
- Update your routing number for automatic withdrawals and deposits
Have you set up a direct deposit with your employer? If so, make sure you share the new routing number with your employer. Likewise, update all service providers and merchants with whom you have set up automatic debit payments from your bank account. You do not need to update services that you pay with your debit card, unless your debit card number changes.
- Carefully go through your previous bank statements to ensure you have updated all automatic transactions
The average Canadian household makes several automatic transactions each month, so it is easy to overlook a few that use the routing number. Check your past statements to ensure you have updated all such transactions.
What is the difference between a routing number and an account number?
Most bank-related financial transactions need both the account number and the routing number. Whether you want to order personal checks online or sign up for a direct deposit, you will need these two key pieces of information. You are assigned these numbers when you open a bank account. And both are listed on the bottom of your paper checks.
A bank account number in Canada is seven to twelve digits long. A routing number, on the other hand, is eight digits long and consists of a three-digit Financial Institution Number and a five-digit Branch Transition Number. The main distinction is in the function they serve.
Your routing number indicates the bank with which you have an account, whereas the account number identifies your individual account.
For instance, let’s say you have two savings accounts or one savings account and one checking account at the same financial institution. You are likely to have the same routing number for your different accounts, but each of them will have a unique account number. Also, while different branches of a bank or a financial institution can use the same routing number, all the accounts have a unique identification number.
Locating a bank’s number is easy; anyone can do that. But since your account number is unique to you, you must safeguard it, just like you protect your PIN.
In Canada and the US, banks and financial institutions use routing numbers to identify themselves. While Canadian institutions have an eight-digit routing number, US banks use a nine-digit number. You need both your account number and routing number to complete financial transactions, so it is important you know both.
Finding a routing number is easy. It is listed at the bottom of your paper check along with your account number. If you don't have your checkbook with you, you can obtain this vital information from your bank's website or by calling customer service.