What is a prenote process?

A prenote process is a common practice used in banking and payroll systems to verify the accuracy of bank account information before initiating direct deposits or transfers.

During a prenote process, a small test transaction is sent to the provided bank account to ensure that the account number, routing number, and other details are correct. This test transaction is usually a small amount of money, such as $0.01, that is immediately withdrawn to confirm the account's validity.

The prenote process typically takes a few business days to complete, during which the bank verifies the account details and confirms that the test transaction was successful. Once the prenote process is completed and the bank account is confirmed as valid, direct deposits or transfers can be initiated with confidence that the funds will reach the intended recipient.

Overall, the prenote process helps to minimize errors and reduce the risk of sending funds to incorrect or invalid bank accounts, ensuring a smooth and secure transaction process.