Bank Code Verification Flashcards

What is a 'prenote' transaction in ACH bank verification?

Answer: A zero-dollar test entry used to validate account and routing details before live transactions

A prenote is a zero-dollar ACH entry sent before actual payments to confirm that the routing number and account number on file are valid and active.

What does ACH return code R01 indicate?

Answer: Insufficient funds in the account

R01 is the standard NACHA return code for Insufficient Funds, meaning the account exists but does not have enough money to cover the transaction.

Which ACH return code signals an invalid account number format?

Answer: R04

R04 (Invalid Account Number Structure) is returned when the account number does not conform to the required format for the receiving financial institution.

Which free resource provided by the Federal Reserve allows instant verification of US routing numbers?

Answer: Federal Reserve E-Payments Routing Directory

The Federal Reserve's E-Payments Routing Directory (EPRD) is the official, free tool for looking up and verifying ABA routing numbers in real time.

How does micro-deposit bank verification work?

Answer: Two small deposits under $1 are sent; the user confirms the exact amounts to prove account ownership

Micro-deposit verification sends two small random amounts to the user's account; only the true account owner can view their statement and confirm the exact values, proving ownership.

Which of the following is NOT a valid method to verify a bank routing number?

Answer: Using the last four digits of a debit card number

The last four digits of a debit card are part of the card number, not the routing number—debit card numbers do not contain or encode routing information.

What does ACH return code R02 indicate about the destination account?

Answer: The account has been closed

R02 (Account Closed) means the routing number is valid but the specific account at that bank is no longer open, requiring updated payment details from the recipient.