What is the ACH Routing Number, and How Do I Find Mine?
It’s likely that you have seen the “ACH routing number” on your bank statement and wondered what it is.
As easy as Wordle, an ACH number is a nine-digit number used to electronically transfer funds.
Understanding what ACH transfers are and how they work is essential. It allows you to figure out payment the options available, and their uses to choose what suits you the best.
What are ACH Transfers?
ACH transfer refers to an electronic transfer from one bank account to another using ACH. ACH stands short for automated clearing house network.
This consists of everything ranging from bill payments to deposits and person-to-person transfers.
Some of the most common uses of ACH bank transfers include
- Bill Payments
- Payroll
- Unemployment Payments
- Tax Refunds
- Social Security
How Do I Find My ACH Routing Number?
Finding your ACH routing number isn’t a big deal. You can find this nine-digit code on the left side of your chequebook account number.
If you are unable to find it, there are other ways of finding an ACH number, too.
You can visit your bank’s website to find your ACH routing number. Almost all banks allow customers to access these codes through their websites.
You can also get in touch with your bank customer support to locate your ACH routing number.
What’s the Difference Between ABA and ACH?
ABA number is a routing number that helps identify the bank. There are several banks that use a similar code for their ABA and ACH routing numbers. However, there’s a basic difference that you need to understand.
An ABA routing number can be used for bill payments, wire transfers, direct deposits, etc.
Whereas an ACH routing number can be used to transfer an amount from one bank account to another.
You can check these numbers by browsing your bank’s website.
All you need to do is to log in to your online banking platform or search “ACH routing number of (bank name)”. This search will lead you to the information you need.
What’s the Difference Between a Wire Transfer and an ACH Transfer?
Before you move money, understand the basic differences between ACH and wire transfers.
Cost and Fees
If you are an entrepreneur, you may have to deal with some processing fees when you choose ACH transfers. There are chances that you may have to pay nothing.
However, it’s a different case with wire transfers. The fees for wire transfers range from $30 to $80. Besides, the state may also charge certain fees.
Availability
Here’s some good news! ACH and wire transfers can be used for both domestic and international transfers.
Speed
ACH transfers may take a few days to process. However, wire transfers are much quicker. They usually occur on the same day and sometimes even at the same hour.
Can I use my IBAN as an ACH Number?
No, you cannot. IBAN and ACH numbers are two different banking standards used for different purposes.
An IBAN number is used across the world for international transfers. An IBAN number helps identify a bank account in international transactions. This number is designed to assist in cross-border transactions. This requires a country code, two digits, and your detailed bank account number.
In contrast, an ACH number is specifically used for domestic transfer within the USA. An ACH number refers to a bank’s routing number necessary for ACH transfers. This number facilitates electronic funds transfer within the USA.
Types of ACH Transfers
There are two different types of ACH transfers – direct payment and direct deposit.
Direct Deposits
Direct deposits are processed to transfer funds directly to the recipient’s bank account. For example, to pay a salary to an employee.
Direct Payments
In direct payments, the recipient has to request funds. For example, you can collect payment from your prospective client.
Benefits of ACH Transfers
Lower Costs
If you’re a business person, you might be very familiar with how processing fees work. But did you know that ACH payments are less costly?
The fees for processing checks, debit, and credit cards can cost you a lot.
Although paper checks have low transaction fees, their costs can increase over time. In contrast, ACH payments stand out as a more cost-efficient option.
So, when you do frequent transactions, you can save a lot.
Speed
ACH transfers are easier and faster to handle than traditional methods.
Unlike cheques, ACH transfers are not held up by hours. It cannot be lost and doesn’t have to be dealt with manually.
Automated Payment Systems
Sending payments via ACH systems allows customers to deal with their funds automatically.
This means that you no longer have to keep an eye on when you have to pay or when you will be receiving funds.
Conclusion
An ACH number is generally known as a nine-digit number used to send money electronically. For decades, ACH numbers have been used to make transactions simpler and more accessible.
Initially, the ACH numbers were quite different from ABA codes. However, with time, these two digits have evolved similarly.
To find your ACH number, you can browse your bank’s website and look at the bottom left corner of your checks. You can also contact your bank directly to inquire more.
Remember, it’s important for individuals to be familiar with their ACH routing numbers. This enables you to get your hands on smooth and error-free financial operations.
Frequently Asked Questions
Do UK Banks use Routing Numbers
No, UK banks do not primarily use routing numbers. Instead, they use a system called the sort code to identify banks and branches for domestic transfers within the UK. The sort code is a six-digit number that directs payments to the correct bank and branch.
Are ACH and Swift codes the same?
ACH (Automated Clearing House) and Swift (Society for Worldwide Interbank Financial Telecommunication) codes serve different purposes. ACH is a network used for electronic funds transfers within the United States, handling transactions like direct deposits and bill payments domestically.
On the other hand, Swift codes are used globally to identify specific banks during international transactions.
