In 1910 the American Bankers Association set up the routing number system. It now handles not only every one of the approximately 28,000 financial institutions that are eligible to maintain an account at a Federal Reserve Bank, but also designates automated clearinghouses, electronic funds transfer and on-line banking. The ABA Routing number (Routing Transit number) has changed over the years to accommodate such things as the Federal Reserve System, MICR encoding (Magnetic Ink Character Recognition), and the implementation of the Expedited Funds Availability Act (you might know that as Regulation CC).
To determine what the numbers mean on the checks you handle, look first at the fraction. Almost all checks have a fraction at the top, right side of the check. (Some very few do not-the validity of the number then can be determined from the MICR line at the bottom of the check.)
The fraction form of the routing number is shown as a multi-digit fraction with a hyphenated numerator (on the top) and a three or four digit denominator (on the bottom). We've illustrated:
For example: 60-117/310
60 - City/State Prefix
117 - ABA Institution Identifier
310 - Federal Reserve Routing Symbol
The City/State Prefix on the top tells you the geographical location of the bank This chart explains those City/State numbers.
ABA City and State Prefix Numbers
1-49 Assigned to Federal Reserve cities and major banking centers
50-58 New York (50) & surrounding states (51-58)
60-69 Pennsylvania (60) & surrounding states (61-69)
70-79 Illinois (70) & surrounding states (71-79)
80-88 Missouri (80) & surrounding states (81-88)
90-99 California (90) & surrounding states (91-99)
101 Various territories - e.g. Guam, Puerto Rico, etc.
Looking at the chart, we can see that the 60 in the fraction above indicates this bank is in Pennsylvania. The number on the right at the top of the fraction informs us exactly which financial institution in Pennsylvania. When the numbers of individual banks were first issued, they were assigned in the relative order of the population of the home town of the bank. Number 117 indicates a fair size town in Pennsylvania in 1910.
On the bottom of the fraction is the Federal Reserve district. There are twelve of them.
Most of the time the zero does not appear in the fractional form of the number. But it must appear in the MICR number at the bottom of the check. The number 310 in the fraction above, then, indicates this bank is served by the Philadelphia Federal Reserve District.
MICR: 9 numbers long
This then takes us to the MICR number on the bottom of the check. The fraction gives us almost all we need for that nine digit number. The first and second digit designate the Fed district (03); the third digit represents the particular Reserve bank or branch office serving the drawee institution. (031); the fourth digit was originally an indicator of credit availability according to a coding system. It has fallen into disuse, but the number is still required and assigned by ABA to make up the total of nine in the routing transit number.(0310) The next four numbers are the numbers of the actual financial institution. That would be the 117 from the top of the fraction. In order to meet the 9 digit format, it has to be four numbers long - so a zero is added in front of the 117. (03100117) Note: Enough zeros must be added so that the total number of digits is four - if the number on the top of the fraction had been 60 - 5, the second four numbers in the MICR line would have been 0005 - (03100005).
Which leaves us with the ninth number. This check digit is a mathematical calculation that is used to verify the accuracy of the routing number that has been determined thus far. The formula is fairly simple. You would multiply the existing eight numbers (03100117) as follows:
Federal Reserve ABA Institution
Routing Symbol Identifier
Multiply 0 3 1 0 0 1 1 7
by x 3 7 1 3 7 1 3 7
0 21 1 0 0 1 3 49 (add) = 75
Subtract your result from the next highest number ending in zero - in this case 80. 80 - 75 is 5, so 5 is the 9th digit of the MICR number - 031001175
If you are determining the number of a savings and loan or a credit union, a factor of 2 is added to the first position in front of the Federal Reserve District number. Instead of 0310 for the Fed Routing Symbol, the number would be 2310. The number of a S & L could be 60-8630/2313. If in Fed districts 10, 11 or 12 - the 2 is added again to the first number. For instance if the number was a credit union in California, the fraction would be 90-7692/3211, while a bank there might be 90-3229/1211. The check digit formula will still work.
This all sounds complicated - but take your own checkbook out and try it. It's easier than it sounds!
[BOL Editor's Note: The rule assigning a special group of numbers to thrifts and credit unions has now been dropped. New numbers are assigned from the same series to banks, thrifts and credit unions. Numbers formerly assigned to thrifts that have been bought by banks are routinely maintained, if needed, by the bank. Therefore it's no longer possible to say for certain that a number beginning with a 2 or a 3 belongs to a thrift or credit union.]
BankersOnline is a free service made possible by the generous support of our advertisers and sponsors. Advertisers and sponsors are not responsible for site content. Please help us keep BankersOnline FREE to all banking professionals. Support our advertisers and sponsors by clicking through to learn more about their products and services.