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Why does my bank have so many routing numbers?

Published June 23, 2018

Consumers enjoy lots of flexibility in banking choices because of regulation that prevents monopolies. Occasionally, though, banks combine or fail and are acquired, and typically their most valuable asset is the accounts already under management. As such, the banks that repeatedly grow through mergers and acquisitions have become very efficient at streamlining the process of onboarding new customers from an existing bank.

At the same time, the Federal Reserve has issued specific routing numbers that have geographical significance, so the banks can't just move everyone wholesale from the old bank's routing number to the new bank's routing number -- as such, they often manage a system of multiple routing numbers based on the type of transaction and the state where the account was first opened.

Even though banks are eligible to receive only five routing numbers from the American Banking Association, mergers can quickly take a single institution well beyond the up-to-five routing numbers initially issued to them.

As some banks have become nationwide through expansion and acquisitions, that means many routing numbers, including some states with multiples. It's always a good idea to reference your online banking to see the routing number that your bank would like you to use; it can be much more efficient to get it right the first time than to guess incorrectly and have your funds misdirected.