What is a Federal Reserve Routing Number ?
Federal Reserve Routing Number – Four-digit number printed as the top half of a fraction in the upper right corner of a check. Identifies the Federal Reserve District to which the Financial Institution belongs.
Routing transit number is a nine-digit numerical code used to identify a banking or other financial institution for the purpose of clearing funds or processing checks in the United States. The routing transit number, as it appears on a check, specifically denotes the banking institution that holds the account in which funds from the check are to be drawn.
PAY2AMIGOS BREAKING DOWN ‘Routing Transit Number (RTN)’
The first four digits of any RTN code will designate the Federal Reserve Bank of the district where the institution is located. The next four digits denote the bank itself, while the last digit is a classifier for the check or negotiable instrument.
RTN numbers are often used when setting up a wire transfer or direct deposit relationship with one’s personal or business bank.
A wire transfer is an electronic funds exchange across a network administered by hundreds of banks worldwide. While no physical currency moves among financial institutions during a wire transfer, information does pass between banks, with regards to the recipient, his or her bank account number, and how much money he or she is receiving. A routing transit number is therefore critical to ensure sensitive information is directed to the appropriate receiving party.
Regarding a direct deposit: senders often use this method for efficient income tax refunds and pay checks. Here, a sender will deposit electronic funds directly into the receiver’s bank account instead of via a paper check. A RTN again is useful in specifying the domain and particular party to whom to direct information.