Bank Code Verified

071904627, Routing Number for BMO HARRIS BANK,N.A., CHICAGO, IL

Routing Number: 071904627

Date of Revision: 091912

Bank: BMO HARRIS BANK,N.A.

Address: 5TH FLOOR

City: CHICAGO

State: IL

Zip: 60606

Phone: (855) 259-8521

Understanding Routing Numbers and Their Significance in Banking Transactions

In today’s world of advanced technology and fast-paced financial transactions, routing numbers play a vital role in ensuring the smooth and secure transfer of funds between banks. These unique identification numbers are often required when setting up direct deposits, initiating wire transfers, or making online payments.

In this article, we will explore what routing numbers are, how they work, and why they are important in the world of banking. I.to Routing Numbers

a.

Definition and Purpose

Routing numbers, also known as routing transit numbers (RTNs), are nine-digit codes assigned to financial institutions in the United States by the American Bankers Association (ABA). These numbers serve as unique identifiers for each bank or credit union and are used to facilitate the transfer of money from one financial institution to another.

b. How Routing Numbers Are Formed

Routing numbers consist of three components.

The first four digits represent the Federal Reserve routing symbol, which indicates the geographic location of the bank. The next four digits are the ABA institution identifier, which identifies the specific bank or credit union.

The last digit is a mathematical checksum that verifies the accuracy of the routing number. II.

The Significance of Routing Numbers in Banking Transactions

a. Direct Deposits

When setting up direct deposit for their salary or government benefits, individuals need to provide their employer or the government agency with their bank account number and routing number.

The routing number ensures that the funds are sent to the correct bank and branch. b.

Wire Transfers

For larger transfers or international transactions, individuals may need to provide the recipient’s bank with their own bank’s routing number. This allows the receiving bank to identify the correct financial institution and process the transfer securely and accurately.

c. Online Payments

When making online payments from one bank account to another, individuals often need to enter their own bank’s routing number to initiate the transaction.

This ensures that the funds are debited from the correct account and credited to the correct recipient. III.

The History of BMO HARRIS BANK, N.A.

a. Origins and Early Years

BMO Harris Bank traces its roots back to 1882 when Norman Wait Harris and Frank S.

Bond established the Harris Trust and Savings Bank in Chicago, Illinois. Over the years, the bank steadily grew and expanded its presence in the Midwest.

b. Acquisition by Bank of Montreal

In 1984, the Bank of Montreal (BMO), one of Canada’s largest banks, acquired Harris Bank, forming BMO Harris Bank.

This acquisition allowed BMO to expand its operations into the United States and provided Harris Bank with access to additional resources and opportunities. c.

Recent Developments

In recent years, BMO Harris Bank has continued to grow and strengthen its presence in the United States. In 2011, it acquired M&I Bank, a regional bank based in Milwaukee, Wisconsin, further expanding its footprint in the Midwest.

IV. Conclusion

Routing numbers are crucial in the world of banking, ensuring the efficient and secure transfer of funds between financial institutions.

Understanding the significance of routing numbers is essential for individuals and businesses conducting various financial transactions. As for BMO Harris Bank, its rich history and strategic acquisitions have positioned it as a leading bank in the Midwest and a key player in the global financial services industry.

III. Key Functions of Routing Numbers

Routing numbers serve various functions within the banking system, ensuring the smooth flow of funds and accurate processing of transactions.

Let’s delve into the key functions of routing numbers:

a. Identifying Financial Institutions

One of the primary functions of routing numbers is to identify specific financial institutions within the United States.

Each bank or credit union is assigned a unique routing number, which allows other financial institutions to accurately route funds to the intended recipient. This helps prevent errors or misdirected payments and ensures that transactions are processed efficiently.

b. Facilitating Direct Deposits

Routing numbers are crucial in facilitating direct deposits, which have become increasingly popular for receiving salaries, government benefits, or other recurring payments.

When an individual provides their routing number along with their bank account number to their employer or the government agency, it enables the direct deposit system to route funds directly to the correct bank and account. This process eliminates the need for paper checks and manual processing, making the transaction quicker and more convenient for both the depositor and recipient.

c. Enabling Electronic Fund Transfers

Routing numbers also play a significant role in electronic fund transfers, enabling individuals and businesses to transfer money electronically between different financial institutions.

Whether it is a one-time transfer or a recurring payment, routing numbers allow the sender’s bank to identify the recipient’s financial institution and route the funds accordingly. This ensures that the funds are securely and accurately transferred, enhancing efficiency and eliminating the need for physical checks or cash payments.

d. Processing Automated Clearing House (ACH) Transactions

ACH transactions, which include various electronic transfers such as direct debits, direct deposits, and online bill payments, rely heavily on routing numbers.

When initiating an ACH transaction, individuals or businesses need to provide their bank’s routing number to authorize the transfer. This routing number allows the ACH network to identify the bank and process the transaction swiftly and accurately.

Whether it is paying bills, making online purchases, or transferring funds between accounts, routing numbers enable the ACH system to facilitate these transactions seamlessly. IV.

The Role of Routing Numbers in Bank Transactions

Routing numbers play a crucial role in various bank transactions, ensuring the accuracy, security, and efficiency of the overall process. Let’s dive into some specific scenarios where routing numbers come into play:

a.

Wire Transfers

Wire transfers are commonly used for transferring a large amount of money domestically or internationally. When initiating a wire transfer, the sender’s bank requires the recipient’s bank routing number to identify the correct financial institution.

This routing number acts as a digital address, guiding the funds to the appropriate bank, branch, and account. Wire transfers are often time-sensitive, and accurate routing numbers are essential to expedite the process and avoid delays or misdirected funds.

b. Online Bill Payments

In today’s digital age, many individuals prefer online bill payments for their convenience and efficiency.

When setting up online bill payments, individuals need to provide their bank’s routing number to authorize the transaction. This routing number ensures that the funds are withdrawn from the correct account and sent to the intended recipient.

Whether it is paying utilities, credit card bills, or mortgage payments, routing numbers are essential for successful online bill payments. c.

Tax Refunds and Government Payments

Government entities, such as the Internal Revenue Service (IRS) in the United States, often rely on routing numbers to process tax refunds and other government payments. When individuals provide their bank account information for direct deposit, the routing number ensures the funds are sent to the correct bank and account.

This streamlines the process, reduces the chances of errors, and expedites the delivery of refunds and payments. d.

Check Processing

While digital transactions are prevalent, checks are still commonly used for certain types of payments. When depositing a physical check, the routing number plays a crucial role in determining the recipient’s bank.

This routing number ensures that the check is routed through the proper channels, processed accurately, and the funds are ultimately transferred to the intended recipient’s account. e.

Interbank Transfers

Routing numbers also facilitate interbank transfers, where money is transferred between different banks or financial institutions. For example, if an individual wants to transfer funds from their BMO Harris Bank account to another bank, they would need to provide their bank’s routing number along with their account number.

This routing number ensures that the funds are transferred securely and accurately to the intended recipient’s bank and account. In conclusion, routing numbers are integral to the functioning of the banking system, providing a reliable and efficient means of transferring funds between financial institutions.

They serve multiple functions, including identifying financial institutions, facilitating direct deposits, enabling electronic fund transfers, processing ACH transactions, supporting wire transfers, online bill payments, tax refunds, check processing, and interbank transfers. Understanding the role and importance of routing numbers is essential for individuals and businesses to navigate the banking world effectively and streamline their financial transactions.

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