what is the purpose of a routing number on a cheque

A routing number is a nine-digit bank identification number that identifies the bank or credit union in a financial transaction. It was developed by the American Bankers Association in 1910 to make transactions quicker and more efficient. The routing number is the first set of nine digits in the bottom left corner of a check. It is used for electronic transactions such as direct deposits, wire transfers, peer-to-peer payments, and bill payments. The routing number identifies the financial institution responsible for the payment and ensures that funds go to the right place. Banks can have separate routing numbers for different types of transactions. The account number, on the other hand, is your unique identifier at that bank. You will need both your bank’s routing number and your account number to make many financial transactions such as setting up a direct deposit or ordering checks online. Routing numbers reduce the chances of miscommunication in money transfer requests.