The American Bankers Association (ABA) routing number, or simply ABA number, is a nine-digit code that identifies the financial institution where an account is held. Each ABA number is unique to a specific bank or credit union and is used to facilitate electronic funds transfers, such as wire transfers and direct deposits.
ABA numbers play a crucial role in the financial system by ensuring that funds are securely and accurately transferred between accounts. They help banks identify the receiving institution and ensure that the funds are credited to the correct account holder. The ABA routing system was first developed in the mid-20th century to streamline the process of electronic funds transfers, which were becoming increasingly common.
