When it comes to financial transactions, you may have come across the terms MICR and bank account number. But do you know what these terms mean and how they differ from each other? This guide will take a closer look at MICR codes and bank account numbers and explain their differences.
What is MICR Code?
MICR stands for Magnetic Ink Character Recognition, which is a nine-digit code that identifies a bank branch which is a part of an Electronic Clearing Service.
It is a technology used in the banking industry to facilitate the processing of cheques and other financial documents. MICR consists of a series of special characters that are printed in magnetic ink at the bottom of cheques and other documents. Specialised machines can read these characters, making large processing volumes of financial documents easier and faster.
The MICR number is printed in a specific format and location on the check to make it easy for the machines to read and process the information. MICR technology has been used since the 90s and is still widely used today.
The MICR code is mostly required when filling up different financial forms such as SIP forms, to enable faster clearance of cheques.
What is a bank account number?
A bank account number is a special sequence of digits that the bank uses to identify specific savings or deposit accounts. It identifies the account and facilitates financial transactions such as deposits, withdrawals, and transfers. The account number is typically listed on the bank’s website or the account holder’s monthly statement or chequebook. It is also required for electronic transactions, such as online bill pay or wire transfers.
Is there any link between a bank account number and a MICR code?
MICR codes and bank account numbers are different. A MICR code is a series of numbers and symbols that is printed on the bottom of checks and other financial documents. It is used to identify and process these documents electronically. In contrast, financial institutions use a unique sequence of account numbers to identify each bank account. It is used to identify the account and facilitate financial transactions. While both MICR codes and bank account numbers are used for financial transactions, they serve different purposes.
Difference between the MICR code and an account number
The following are the five distinctions between the MICR code and the bank account number:
Purpose
MICR is a technology used to process and clear financial documents, such as cheques, while the bank account number is a unique identification number assigned to a bank account.
Format
The MICR code consists of a series of numbers and special characters printed using magnetic ink, while the bank account number is typically a series of digits.
Location
The MICR code is typically printed at the bottom of cheques and other financial documents. At the same time, the bank account number is usually found on bank statements, chequebooks, and other documents related to the account.
Usage
The primary goal here is to facilitate the recognition of the financial institution and its branch, while the bank account number is used to identify the account for financial transactions.
Information contained
The MICR code typically includes the bank account number, cheque number, and bank code, while the bank account number only includes the identification number for the account.
How to find MICR number?
One can easily locate the MICR number of a bank cheque. The MICR number is mentioned at the bottom of the cheque leaf, printed on the right side of the cheque number.
Is MICR and IFSC code same?
The IFSC code refers to Indian Financial System Code, which is a 11-digit alphanumeric code used for identifying different bank branches that engage in online fund transfers through NEFT, IMPS and RTGS. The IFSC only represents the bank code and its branch code. On the other hand, the MICR code is a nine-digit code that denotes the PIN code, bank code and branch code.
FAQs
What is the difference between MICR and bank account numbers?
The MICR code is used to process and clear cheques and other financial documents, while the A bank account number is a unique number used to identify a single bank account for financial transactions.
Is the MICR code the same as the bank account number?
No, the MICR code is typically different from the bank account number. The MICR code includes the bank account number, cheque number, and bank code, while the bank account number is a unique identification number assigned to a specific bank account.
Where can I find the MICR code on a check?
The MICR code is typically printed on the bottom of cheques and other financial documents below the signature line.
Can I use the MICR code to deposit or withdraw from my bank account?
Banks and other financial institutions use the MICR code to process and clear financial documents. You will need to use your bank account and IFSC number to deposit or withdraw from your bank account.
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