In the United States, the Federal Reserve Bank assigns bank codes.
A bank code is an identification code composed of alphanumeric characters that serves as the electronic address of a financial institution. The names and wording of codes may vary between countries. These codes make it possible to transfer money electronically from one institution to another.
In the United States, a bank code is a nine-digit number known as a routing transit number (RTN). The RTN is placed between the colon marks (:) on the lower left side of a check space. The number following the RTN is the individual account number.
In the United States, a bank code is the nine-digit number known as a transit routing number found between two points on a check.
These designations were originally called ABA codes because they were assigned by the American Bankers Association (ABA). The ABA began assigning codes to all American banks in 1910, but this responsibility was later taken over by the Federal Reserve Banks. The first four numbers represent the Federal Reserve Bank branch for the area, the next four identify the specific bank, and the last number tells you the type of account being used, such as a checking or savings account.
In the US, bank codes may allow the electronic transfer of money from one institution to another.
In Canada, banks use an eight-digit bank code called a Bank Transit Number (BTN). Other countries refer to a bank code as a classification code. The number of characters used by different countries varies, ranging from just four digits in Denmark to ten digits in Spain. In all cases, however, the code serves to identify the country and location of the institution where the funds are being held.
International bank code systems were established to allow money transfers between banks in different countries. One of them is called the Bank Identifier Code (BIC). The BIC is an eight-letter designation that identifies the bank, country and city, and is assigned by the Society for Worldwide Interbank Financial Telecommunications (SWIFT). While the US has its own encryption system, banks located there also have a SWIFT code that allows for the completion of international money transfers.
The European Union’s Committee on Banking Standards has passed regulations requiring that, from 2004, all financial institutions in member countries receive an additional bank code, called the International Bank Account Number (IBAN). The IBAN is an alphanumeric designation and can contain a maximum of 34 characters. They are governed by ISO 13616, a regulation issued by the International Organization for Standardization (ISO). The first two letters of the IBAN are the BIC country code, followed by a two-digit control key, the bank’s classification code, and an account number.
In the United States, Canada, and many other countries, bank code and account numbers must be printed on checks using magnetic ink and a magnetic ink character recognition (MICR) font. This type of printing allows checks to be read electronically. In some regions, banks can face fines and other penalties for failing to use the proper ink and font on checks.