Prenotes

Prenotes, or pre-notes, are electronic verification messages used in automated clearing house (ACH) payments to confirm bank account details before initiating direct deposits or other electronic funds transfers. A prenote is typically a zero-dollar test entry that checks that the provided bank routing and account numbers are valid and capable of receiving transactions.

How it works: When a payer (such as an employer or payroll processor) sets up a new direct deposit or updates bank information, the system may send a prenote to the recipient's bank through the ACH network. The prenote does not transfer funds; instead, it prompts a confirm/refusal response from the bank.

Timing and activation: The prenote process generally takes one to several business days. A successful prenote clears the way for live direct deposits to begin on the next payroll cycle. If the prenote fails, the transaction is held or the information must be corrected and reprocessed.

Use and limitations: Prenotes are common in payroll, vendor payments, and benefits disbursements. They reduce the risk of funds being sent to an incorrect account, but they can delay the start of payments and do not guarantee future deposits beyond the tested account.

Regulation and safety: In the United States, prenotes operate under NACHA rules and the ACH network; organizations must comply with privacy and data protection requirements. Sensitive banking details are transmitted securely.