Canadian Transit Number

A Canadian transit number is a five-digit number that identifies a specific branch of a bank, credit union or other financial institution in Canada. Combined with the institution's three-digit institution number, it forms the routing information used to send cheques, direct deposits, pre-authorised debits and electronic transfers to the right place. The customer's own account number, usually seven to twelve digits, then identifies the account at that branch.

The transit number plays a similar role to the American routing number, the UK sort code or the Australian BSB, all of which are national payment clearing codes. It is printed on cheques in magnetic ink and shown in online banking and on direct deposit forms. The numbering system is administered by Payments Canada, the organisation that operates Canada's national clearing and settlement systems.

Canadian routing details are written in two formats:

• Paper or MICR format. On cheques, the routing number appears as the five-digit transit number, a hyphen and the three-digit institution number, for example 12345-003. It is printed using the MICR code font so that it can be read by cheque processing machines.
• Electronic format. For electronic payments, the same information is written as a nine-digit number starting with a zero, followed by the institution number and then the transit number, for example 000312345.

Confusing the two formats, or reversing the order of institution and transit numbers, is a common cause of failed payments, particularly for payers outside Canada who are used to the US routing number layout.

Each financial institution that takes part in clearing has its own institution number. Well-known examples include 001 for Bank of Montreal, 002 for Scotiabank, 003 for Royal Bank of Canada, 004 for TD Canada Trust, 006 for National Bank of Canada and 010 for CIBC. Credit unions often clear through a central credit union or another institution and may use that institution's number with their own transit numbers. Large banks have hundreds of transit numbers, one for each branch, though accounts may stay linked to their original branch even when customers bank mainly online.

The transit and institution numbers are needed for most account-based payments in Canada:

• Payroll and benefits. Employers and governments use them to make direct deposits through Payments Canada's automated funds transfer system.
• Pre-authorised debits. Utilities, insurers and lenders use them to collect regular payments under Canada's pre-authorised debit rules, a form of preauthorized debit.
• Wires. Domestic large-value payments use them to reach the beneficiary account, while international wire transfers into Canada typically need both the SWIFT BIC of the receiving bank and the transit and institution numbers.
• Cheques. The numbers route cheques through clearing, now mostly as digital images.

Consumer-to-consumer transfers by Interac e-Transfer, by contrast, normally use an email address or mobile number, so customers do not need to share routing details.

Canada does not use the IBAN system. Payments from countries that do, such as those in Europe, therefore require the sender's bank to accept a Canadian local account format made up of institution, transit and account numbers. The US system combines bank and processing information in one nine-digit routing transit number with a check digit, while the Canadian electronic format packs institution and branch codes together without a check digit. India's equivalent is the IFSC code, an alphanumeric branch identifier.

Payments Canada maintains the official register of institution and transit numbers and publishes the rules that govern how they are used in its clearing systems. Institutions apply to it for new transit numbers when they open branches or create processing centres, and notify it of closures and mergers. Some transit numbers do not belong to physical branches at all but to central processing units, online-only banks or government payment programmes. Payment providers that are not members of Payments Canada reach accounts through a member institution acting as their clearing agent, and federal legislation such as the Retail Payment Activities Act now supervises many of these providers.

Customers can find their transit number on a cheque, in their banking app or on a void cheque or direct deposit form provided by the bank. Payment firms that send money to Canada validate the format and check institution numbers against Payments Canada's directory to reduce returns. Because transit numbers identify branches, mergers and branch closures can change them; banks usually keep old numbers working or redirect payments, but businesses that store account details should update records when notified. As Canada modernises its payment systems, including the Lynx high-value system and a planned real-time rail, institution and transit numbers remain the basic way of identifying where accounts are held.

• Payments Canada