How soon must the first live dollar entry follow the settlement date of a prenote?

How soon must the first live dollar entry follow the settlement date of a prenote?

• A. 2 banking days
• B. 5 banking days
• C. 3 banking days
• D. 7 banking days

Answer: (C)

The correct answer is that the first live dollar entry must follow the settlement date of a prenote within three banking days. This timeline is established to ensure that the receiving financial institution has sufficient time to verify the validity of the banking information submitted in the prenote. In the ACH environment, a prenote is a zero-dollar transaction used to confirm that the recipient's account details are correct before any actual monetary transfers take place. After the prenote has been settled, the originator has a limited timeframe to initiate the first live dollar entry. This three-day limit is crucial in maintaining the efficiency and integrity of ACH transactions, reducing the risk of errors that could arise from outdated or incorrect account data. Thus, compliance with this timeframe helps to ensure smooth transactional processes and upholds the standards set by the National Automated Clearing House Association (NACHA) for the ACH network.

The correct answer is that the first live dollar entry must follow the settlement date of a prenote within three banking days. This timeline is established to ensure that the receiving financial institution has sufficient time to verify the validity of the banking information submitted in the prenote.

In the ACH environment, a prenote is a zero-dollar transaction used to confirm that the recipient's account details are correct before any actual monetary transfers take place. After the prenote has been settled, the originator has a limited timeframe to initiate the first live dollar entry. This three-day limit is crucial in maintaining the efficiency and integrity of ACH transactions, reducing the risk of errors that could arise from outdated or incorrect account data.

Thus, compliance with this timeframe helps to ensure smooth transactional processes and upholds the standards set by the National Automated Clearing House Association (NACHA) for the ACH network.