What is a "micro-deposit" in ACH transactions?

A "micro-deposit" refers to a small amount of money that is deposited into a bank account, typically used for the purpose of verifying that the account is valid and owned by the individual or entity that provided the account details. This method is commonly used in transactions where establishing the legitimacy of the bank account is crucial, such as in account verification processes for peer-to-peer payment systems or direct deposit setups.

Micro-deposits are usually a few cents, often in the range of $0.01 to $0.99, and the recipient is usually asked to confirm the exact amount of the deposit to prove their ownership of the account. This step is essential in preventing fraud and ensuring that funds are transferred accurately.

The other options do not fit the definition of a micro-deposit: large deposits are significant transactions and not typically used for verification purposes; payments for services rendered refer to transaction payments and not account verification; and withdrawals under $1 do not relate to deposits, which are what micro-deposits signify.