Home Wire Transfers What is a Transit Number?

What is a Transit Number?

Banking terminology can be confusing and many phrases sound interchangeable. While those living outside the US and Canada might not be familiar with transit numbers, they are an integral part of transferring money in North America. In this guide, we outline the definition of a transit number, how it is used by various financial institutions and in what context it may be required. 

Updated: 06/05/2021
Read time: 4 minutes
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What is a transit number? 

A bank transit number is a series of nine digits that identifies a specific financial institution. Each bank is issued an identifying transit number and, much like a serial number, this is how every financial institution is chartered. When sending and receiving money transfers between banks, the transit number will always be required, in order to move the money from A to B.

A transit number will always appear in the same format: nine numerical digits, without spaces or dashes, not to be confused with an IBAN or account number

Each digit refers to different identifying factors used as recognition:

  • First 4 digits refer to the bank’s location (this can be different depending on the US state)
  • Next 2 digits refer to the Federal Reserve bank routing the transaction
  • The 7th digit refers to the bank’s Federal Reserve check processing centre 
  • The 8th digit refers to the Federal Reserve district where the bank is based 
  • The 9th and final digit is a security number

Transit number and routing number: What is the difference?

These are the same thing; transit number and routing number are synonymous terms. Both refer to the nine digit configuration which identifies your bank. Other names for transit numbers include:

  • A routing number
  • US bank routing number
  • A bank routing number
  • A cheque routing number
  • A local routing number
  • An RTN number
  • A Fedwire number
  • An ABA number 
  • An ABA routing number

How do transit numbers work?

Bank transit numbers have been used for over a century; established by the American Bankers Association as a way of facilitating and tracking transactions between different banks. Due to the technological advances made over the last 100 years, banking institutions now rely on computers to automate transactions. Despite the evolution of banking technology, transit numbers remain a crucial part of many banking processes.

These processes include money transfers such as direct deposits that use transit numbers to determine where the money is being deposited, and ACH and wire transfers which cannot be completed without a transit number. Considering how many thousands of commercial banks, investment banks, credit unions and brokerage firms offer financial services across North America, transit numbers are still a vital way of deciphering institutions.

Where are transit numbers used?

Transit numbers are used by banks in the United States and Canada; however banks in the UK use a similar number system, known as a sort code. 

Due to the size of the United States, certain institutions use different transit numbers to differentiate between the physical location of each bank. For this reason, you should familiarise yourself with your bank’s transit number before initiating any kind of money transfer. 

How to find your bank transit number

Transit numbers are easily found: they will appear in your online banking account alongside your bank details, as well as listed on your bank’s website. You can also request the information by contacting your bank over the phone or in-person. 

If you have a cheque book, the number can also be found in the bottom left corner of your cheques. The transit number is printed here so other banks can identify which bank the cheque was issued by.

The transit number refers to the bank and is not specific to your account. For example, you and your partner may both have active accounts with the same bank, which means your transit number will be the same, but your account numbers will be unique.

Summary

Over 100 years later, bank transit numbers continue to provide a quick and easy system for deciphering which banks are involved in a transaction. Be aware of the differences between transit numbers and account numbers: one refers to your banking institution and the other is unique to your personal bank account. Read our guide on how to find a routing number to learn more about the differences before making your money transfer.

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