Most rejected or misdirected EFT payments start with a void cheque. Someone reads the numbers along the bottom, types them into the accounting system, and swaps two fields or drops a leading zero. The payment then bounces days later, or worse, lands in the wrong account. This guide explains what each group of digits on a Canadian cheque means, the order they appear in, and how to record them so that a vendor payment file is right the first time.
The line at the bottom of the cheque
The row of digits printed in magnetic ink at the bottom of every Canadian cheque is the MICR line (Magnetic Ink Character Recognition). Its layout is set by Payments Canada's cheque standard, so it reads the same way at every bank and credit union. From left to right:
001 12345 003 1234567
cheque no. transit institution account
On the printed cheque, special bracket-like symbols separate the groups, and the transit and institution are usually joined by a dash-like symbol. Ignore the symbols; only the digits matter.
| Group | Length | What it identifies |
|---|---|---|
| Cheque number | Usually 3 to 5 digits | This particular cheque. Not needed for EFT. |
| Transit number | Exactly 5 digits | The branch that holds the account. |
| Institution number | Exactly 3 digits | The bank or credit union. |
| Account number | Up to 12 digits | The account itself, at that branch. |
The cheque number is often also printed in the top right corner. That is the easiest way to confirm which group of digits is the cheque number and which is the account.
The three numbers, one by one
Institution number (3 digits)
This identifies the financial institution nationally. It is the same for every branch and every account of that institution.
| Institution | Number |
|---|---|
| BMO Bank of Montreal | 001 |
| Scotiabank | 002 |
| RBC Royal Bank | 003 |
| TD Canada Trust | 004 |
| National Bank of Canada | 006 |
| CIBC | 010 |
| HSBC Canada | 016 |
| Laurentian Bank | 039 |
| Desjardins | 815 |
Always keep the leading zeros: RBC is 003, not 3. In an EFT file the field is three characters wide and 3 is not the same as 003.
Transit number (5 digits)
The transit number identifies the branch. At the big banks the number is often meaningful to bank staff (part of it indicates the region), but for payment purposes it is just five digits. It can start with zero. Two accounts at the same bank in different cities will have different transit numbers, so never copy a transit number from one vendor to another because "they both bank at TD".
Account number (up to 12 digits)
The account number is printed exactly as the bank formats it, which may include spaces or dashes: 12-34567, 1234 567. Payments Canada allows up to 12 characters in an EFT file, and banks expect the digits only. Remove spaces and dashes, keep every digit, and keep leading zeros. If the vendor's account number has fewer than 12 digits, that is normal; the field is padded with spaces in the file.
Order matters: cheque order is not file order
On the cheque, the order is transit, then institution. In an EFT 1464 file, the two are written as one 9-digit field with the institution first: 0 + institution + transit. A cheque showing transit 12345 and institution 003 becomes 000312345 in the file.
Accounting systems usually ask for the three numbers in separate fields, so you do not have to build the 9-digit string yourself. But you do have to put the right value in the right field. The safest habit is to read the lengths: the 5-digit group is the transit, the 3-digit group is the institution. If your "institution" has five digits, the fields are swapped.
Direct deposit forms and other sources
A void cheque is not the only acceptable source. Most banks let customers download a direct deposit form or a "void cheque" PDF from online banking. These forms label the three numbers explicitly, which removes the reading problem. They are also better than a photographed paper cheque, because they cannot be misread through a crease or a shadow.
Whatever the source, ask for it directly from the vendor and, for a new vendor or a change of details, confirm by a second channel (a phone call to a known number). Changing a vendor's banking details on the strength of an unverified email is a classic payment fraud pattern.
Edge cases worth knowing
- Desjardins. Desjardins caisses use institution number 815, and members often refer to their account as a "folio". The transit is the caisse number, 5 digits. The folio is the account number.
- Credit unions. Credit unions in each province clear through a central and have their own institution numbers. Zefty currently supports the nine institutions listed above as the originating bank; vendor accounts at other institutions can still be paid if the institution number is valid in the Canadian financial institutions file.
- US cheques. A US cheque shows a 9-digit ABA routing number and cannot be paid through a Canadian EFT file. If the vendor has a Canadian-dollar account at a Canadian bank, ask for that one instead.
- Cheques with a long account number. Some business accounts print more than 12 characters, including a prefix or suffix. Confirm with the vendor which digits are the account number for direct deposit purposes.
- Old cheques. Branches merge and transit numbers change. If a cheque is several years old, ask for a current direct deposit form.
Recording the numbers for EFT payments
In Zoho Books, each vendor has a bank account section where you can store the institution, transit and account numbers. By default, Zefty reads the details from there. If your organization prefers custom fields (for example because you already track banking details that way), you can point Zefty at three custom fields in Zoho configuration under Zoho Books Settings: one for the account number, one for the transit and one for the bank (institution) number.
After a sync, the Vendors page in Zefty shows the bank, transit and account for each vendor and a Ready to export flag. A vendor with anything missing shows a red "Missing banking information" hint, and their bills appear in red on the Bills page and cannot be selected. Vendor account, transit and institution numbers are encrypted at rest in Zefty.
A five-point check before you save
- Institution number has three digits and matches the bank named on the cheque.
- Transit number has five digits, including any leading zero.
- Account number contains digits only, with every leading zero, and no more than 12 characters.
- The cheque number (top right) has not been recorded as the account number.
- The details came from the vendor directly, or were verified with the vendor, not from a forwarded email alone.
Ten seconds of checking here is cheaper than a returned payment and a second file a week later.
Key takeaways
- A Canadian cheque's MICR line reads: cheque number, 5-digit transit, 3-digit institution, account number of up to 12 digits.
- Keep leading zeros in all three numbers; remove spaces and dashes from the account number.
- In an EFT file the institution comes before the transit (
0+ institution + transit); in your accounting system, put each number in its own field. - Prefer a bank-issued direct deposit form over a photographed cheque, and verify new or changed details by a second channel.
- Store the numbers in the vendor's Zoho Books bank account or in custom fields; Zefty syncs them, flags anything missing and encrypts them at rest.
Once your vendor records are clean, the rest of the payment run is a few clicks. See How it works for the flow from Zoho Books bill to bank upload, or check the compliance page for how these numbers are placed inside the EFT 1464 record.