Pre-Notification (Prenote)

Pre-notification is a preliminary step in the Automated Clearing House (ACH) payment process. Before initiating the first ACH entry to a receiver or the receiver's account at a Receiving Depository Financial Institution (RDFI), an ACH originator has the option to send a pre-notification. This notification is delivered through an Originating Depository Financial Institution (ODFI) to the ACH operator, which then transmits it to the appropriate RDFI.

The purpose of the pre-notification is to inform the RDFI that the originator intends to initiate one or more ACH entries to the receiver’s account as authorized by the receiver. This notification is typically used to verify that the account details provided by the receiver are correct and that the RDFI will accept ACH debits or credits on behalf of the receiver. It acts as a safeguard to ensure that future transactions process smoothly without any issues related to account validity or authorization errors.

Pre-notifications do not involve the movement of funds but are purely informational. They are generally sent at least six banking days before the initiation of the first ACH transaction to allow sufficient time for the RDFI to respond if there are any issues with the account information. If no response is received, it is typically assumed that the account details are correct, and the originator may proceed with the ACH transactions as planned. This proactive measure helps in reducing the risk of failed transactions and the administrative burden associated with correcting transaction details post-factum.