Microdeposits

Microdeposits are small verification deposits used by financial services to confirm ownership of a bank account when enabling transfers such as ACH payments or direct debits. The deposits are typically two or more tiny sums that appear on the account’s statement and are distinct from regular charges.

They are primarily used to verify that the person initiating a transfer has access to the claimed bank account. This reduces the risk of fraud when linking accounts for deposits, withdrawals, refunds, or recurring payments.

Process typically works as follows: a service initiates two microdeposits to the bank account. The account holder waits for the deposits to post, usually within one to three business days. The user then enters the two amounts on the service’s website or app. If the amounts match, the account is verified and transfers can begin. If the deposits do not appear or are entered incorrectly, the deposits can be resent or another verification method can be used.

Some providers offer alternative verification methods, such as instant verification or linking via a bank login, particularly when rapid verification is needed. Microdeposits are a widely used but not universal method, and may be complemented or replaced by other technologies in some cases.

Security and limitations include the low-value nature of the deposits, which limits risk, and the requirement that the user controls the linked account. They may fail if the account is closed, renamed, or if the funds cannot be posted due to processing delays, weekends, or bank restrictions. Users should ensure they are linking to legitimate services.